SA November leading indicator up

Filomena Scalise

Johannesburg - SA's composite leading business economic indicator rose by 1.1% year on year in November‚ after a revised 0.7% (0.5%) y/y increase in October‚ data released on Tuesday by the South African Reserve Bank (SARB) shows.

The country's seasonally adjusted leading economic indicator provides a guideline for economic growth for at least six months ahead.

The Reserve Bank said the composite leading business cycle indicator increased by 0.8% in the month of November compared with the preceding month.

Seven of the 11 component time series that were available for November increased‚ while four decreased‚ the Reserve Bank reported.

The latest reading takes the indicator to an index level of 131.5 in November‚ compared with a revised 130.4 (130.1) in October.

The largest positive contributions in November came from an acceleration in the 12-month percentage change in job advertisements space‚ followed by an acceleration in the twelve-month percentage change in the composite leading business cycle indicator of SA’s major trading partner countries.

The major negative contributions to the movement in the leading indicator in November came from a deceleration in the twelve-month percentage change in the number of new passenger vehicles sold‚ as well as a deterioration in the BER’s Business Confidence Index.

The composite coincident business cycle indicator decreased by 0.8% on a month-to-month (m/m) basis in October and was up 4.9% year on year in October.

The composite lagging business cycle indicator decreased by 1.8% m/m in October. It was down 1.5% year on year in October from a 0.6% year on year increase in September.

The SARB uses more than 200 economic time series to determine the turning points of the SA business cycle. Using these indicators‚ the leading‚ coincident and lagging composite business cycle indices are produced‚ indicating the direction of the change in economic activity rather than the level of economic activity. - I-Net Bridge