Reserve Bank’s leading indicator dips, but seven of nine components rise
The Reserve Bank’s composite leading business cycle indicator for June declined marginally, to 95.7 from 95.8 in May.
The indicator‚ released on Tuesday‚ is a strong indicator of SA’s economic growth cycle for the next six to 12 months.
Decreases in two of the nine components narrowly outweighed increases in the seven other components, the Reserve Bank said.
The negative contributions were a decrease in the number of building plans passed, as well as a deceleration in the 12-month percentage change in job advertisement space.
The largest positive contributions to the movement in the composite leading indicator in June resulted from an acceleration in the 12-month percentage change in the composite leading business cycle indicator of SA’s major trading-partner countries, followed by an increase in the volume of orders in manufacturing.
The Bank compiles the leading indicator by assessing monthly movements in various economic indicators such as interest rate spreads‚ commodity prices and new passenger vehicles sold.
The composite coincident business cycle indicator‚ which moves in line with current economic growth‚ increased 0.3% in May from April‚ while the composite lagging business cycle indicator increased 1.4% in May, month on month.