AFTER disappointing readings in November, the IJG Business Climate Monitor (BCM) has not reversed the downward trend that started in July 2018 and dropped from 48.92 points in November to 48.52 points in December.
In contrast, the Leading Indicator recovered from a slight dip in November to increase to 48.44 in December – the highest value since September 2016.
The Leading Indicator entered negative territory in October 2016. However, both indicators remained below the 50-point mark implying that the economy is still facing headwinds.
Giving commentary on the business climate monitor, Economic analyst, Klaus Schade, stated that out of the 31 indicators used in the calculation of the BCM, 15 showed an improvement while 15 declined.
There was some good news for consumers in December, because fuel prices dropped for a second consecutive month – and substantially – resulting in a slowdown of inflation. Credit extended to individuals continued to increase as throughout the year, with the exception of June 2018, that saw a slight decline. In contrast, credit extended to businesses fell slightly compared to November.
Vehicle sales recorded their lowest sales in almost a decade, with 732 units sold – the lowest sales since May 2009 when 629 units were sold. Although improving to NAD64.9 million from NAD41.0 million in November.
The value of building plans approved by the City of Windhoek remained way below previous levels. The number of livestock marketed dropped to the lowest level in 2018 due to seasonal factors. Lamb prices, however, moved to the highest level this year, while beef prices were the second highest after November.
The number of tourist arriving at the international airport dropped to the second lowest number this year after arrivals in February.
“Overall, while the improvement in the Leading Indicator in December provides some relief, it has not returned to positive territory again. Furthermore, the continued decline of the BCM indicates that economic conditions are not yet improving. The multitude of economic challenges will continue into 2019,” Schade concluded.