BCM more upbeat about prospects

The leading indicator of the IJG Business Climate Monitor (BCM) in September experienced one of its biggest improvements so far this year, the Institute for Public Policy Research (IPPR) says in its latest report.

The leading indicator – a measurement of business expectations – climbed by by 2.60 points to 43.75, continuing its upward trend for the fourth consecutive month.

“The upward movement of the leading indicator indicates that there is a silver lining for the domestic economy, even though it remains below the 50 point mark that separates an economic expansion from a contraction,” the IPPR says.

The further recovery of the leading indicator should also bode well for a recovery in the BCM in the near future, the report states.

The BCM, however, dropped for the third consecutive month in September.

“It fell by 0.67 points to 52.15 points and hence follows, as expected, the leading indicator that had declined between March and May,” according to the IPPR.

Indicators

Beef prices showed further improvements, while lamb prices remained at the same level. The number of livestock marketed dropped, which may have contributed to higher beef prices.

Copper and uranium prices also moved upwards in September as compared to August. Tourist arrivals at Hosea Kutako International Airport continued to increase, as did commercial vehicle sales and credit extended to individuals and businesses.

In contrast, gold prices dropped and the value of building plans approved by the Windhoek municipality fell sharply.

After a surge in August, most likely linked to fishing rights applications, the number of CCs, companies and defensive names registered declined.

“Overall, there are positive signs of recovery as reflected in the rising leading indicator. However, the further decline in the IJG BCM and the split in the numbers of indicators moving up and down indicate that the economic climate remains volatile,” the IPPR says.