The South African Reserve Bank’s business cycle indicator fell by 0.9% in March compared with the previous month, the bank said on Tuesday.
Seven of the ten sub-components making up the headline index contributed to the fall of the index while only three increased, the bank said in a statement.
“The major negative contributors were the twelve-month percentage change in the composite leading business cycle indicator of South Africa’s major trading-partner countries, as well as the twelve-month percentage change in job advertisement space.”
The indicator is a forward looking index that collates data such as job advertisements and volume of manufacturing orders to gauge the economic outlook.
“The choppy nature of growth exhibited in some facets of the economy through the various sub-components of the index, continues to reflect the still uneven nature of the economic recovery in South Africa,” said Absa Capital in a note.
“In part (this) underpins our view that the hiking cycle is still some way off in South Africa,” it added, seeing monetary tightening starting in January 2012.
The central bank has left the repo rate steady this year after reducing it by 650 basis points to 5.5% between December 2008 and Decembner 2010. — Reuters