The Reserve Bank’s composite leading business cycle indicator fell for the 10th consecutive month in July on an annualised basis, underscoring the fragile nature of SA’s economic recovery.

The indicator fell 1.5% to 103.9 points in July from the same month in 2018, the Bank said on Wednesday.

Hopes of a quick economic turnaround this year have ebbed, with a series of recent data releases showing that the confidence boost that followed President Cyril Ramaphosa’s ascent to the presidency in early 2018 has faded. However, SA avoided a technical recession in the second quarter due to a recovery in the mining and manufacturing sectors.

Month-on-month, the indicator rose 0.7%, the Bank said in a statement on Wednesday. Increases in five of the 10 available component time-series outweighed decreases in the remaining five.

The indicator is a strong projection of SA’s economic growth cycle for the next six to 12 months.

The largest positive contributions to the movement in the composite leading business cycle indicator in July came from an acceleration in the 12-month percentage change in job ad space and an increase in the SA export commodity price index (dollar based).

The largest negative contributions came from a deceleration in the 12-month percentage change in the number of new passenger vehicles sold and a deterioration in the Bureau for Economic Research’s business confidence index.

The Bank compiles the leading indicator by assessing monthly movements in various economic indicators such as building plans passed, commodity prices and new passenger vehicles sold.

The composite coincident business cycle indicator, which moves in line with current economic growth, increased by 0.2% in July from the previous month.