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Johannesburg - The South African Reserve Bank’s monthly economic indicator fell by 0.4% month-on-month in December as four of its 10 components decreased, the bank said on Tuesday.
The indicator collates data such as business confidence, job advertisements and volume of manufacturing orders to gauge the economic outlook. It was generally soft for most of 2011.
Decreases in newspaper job advertisements, a deterioration in the composite leading business cycle indicators of South Africa’s major trading partners, fewer hours worked in the manufacturing sector and softer commodity prices in the month all contributed to the fall.
Business activity usually slows down during December for holidays.
“In spite of the deterioration, we note that the index remains over 25% higher than its most recent recessionary low in March 2009,” said Absa Capital in a note.
“This suggests still relatively reasonable growth prospects for the economy over the next few quarters,” the bank said, but added growth would be slightly modest this year partly due to the uncertainties in the global economy.
The indicator collates data such as business confidence, job advertisements and volume of manufacturing orders to gauge the economic outlook. It was generally soft for most of 2011.
Decreases in newspaper job advertisements, a deterioration in the composite leading business cycle indicators of South Africa’s major trading partners, fewer hours worked in the manufacturing sector and softer commodity prices in the month all contributed to the fall.
Business activity usually slows down during December for holidays.
“In spite of the deterioration, we note that the index remains over 25% higher than its most recent recessionary low in March 2009,” said Absa Capital in a note.
“This suggests still relatively reasonable growth prospects for the economy over the next few quarters,” the bank said, but added growth would be slightly modest this year partly due to the uncertainties in the global economy.
