South Africa’s leading economic indicator weakened again, pointing to slower momentum in the economy in the months ahead.
The South African Reserve Bank (SARB)’s composite leading business cycle indicator declined by 0.3% in May, marking another month of deterioration.
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SARB indicator suggests SA economy may be headed for slower growth
The drop was driven mainly by weaker business confidence and a slowdown in residential building plans approved.
On the upside, stronger money supply growth and higher new passenger vehicle sales helped cushion the decline.
The latest data suggests that while parts of the economy remain resilient, underlying business activity continues to lose momentum.
A sharp fall in business confidence was the biggest drag on the leading indicator, highlighting ongoing concerns among companies about the economic outlook.
The Reserve Bank’s coincident indicator, which reflects current economic conditions, also slipped by 0.4% in April, weighed down by weaker wholesale, retail and motor trade sales, as well as lower industrial production. Meanwhile, the lagging indicator edged 0.1% higher.
The SARB will publish its next set of composite business cycle indicators on 25 August.
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