THE outlook for the South African economy over the next six months has deteriorated, according to the Reserve Bank, which said on Tuesday that its composite leading business economic indicator declined by 0.1% year on year in November, after rising a revised 0.6% in October.
The October increase was revised from a previously reported 0.1% rise.
The seasonally adjusted leading economic indicator provides a guideline for economic growth for at least six months ahead, by tracking the monthly movements of major indicators such as new passenger vehicles sold, job ads and business confidence.
Four of the 11 component time series available for November 2013 fell, with the biggest negative effects seen in a drop in the number of residential building plans passed and slowing money supply growth.
The Bank said the composite leading business cycle indicator decreased by 0.2% in November after a rise of 0.2% in October.
The largest positive contributions to the movement in the composite leading indicator in November came from an increase in the export commodity price index, followed by an acceleration in the 12-month percentage change in the composite leading business cycle indicator of South Africa’s major trading partner countries.
The composite coincident business cycle indicator increased by 1.2% month on month in October after it decreased by 0.8% in September.
The composite lagging business cycle indicator increased by 0.3% in October after it fell by 0.6% the previous month.
The Bank uses the leading‚ coincident and lagging composite business cycle indices to indicate the direction economic activity is likely to take in the short term.