Economic activity in September increased for the first time in three months, and by the most since May 2021, data from the SA Reserve Bank shows.
The Reserve Bank’s composite leading business cycle indicator released on Tuesday, which offers a projection of SA’s economic growth cycle for the next six to 12 months, shows that momentum in economic activity increased by 1.4% on a monthly basis, rebounding from a 2.3% fall the previous month.
Reserve Bank data shows that five of the nine available component time series increased, while the remaining four decreased.
The largest positive contributors were an acceleration in the six-month smoothed growth rate of job advertisement space and an increase in the number of residential building plans approved. The largest negative contributors were a deceleration in the six-month smoothed growth rate of new passenger vehicle sales and slower year-on-year growth in the composite leading business cycle indicator for SA’s main trading partner countries.
The indicator is compiled with the Bureau for Economic Research (BER) and is calculated on the basis of building plans approved; new passenger vehicles sold; the commodity price index for main export commodities; an index of prices of all classes of shares traded on the JSE; job advertisements; volume of orders in manufacturing; real money supply (comprising currency, demand deposits and other liquid deposits such as savings deposits); average hours worked per factory worker in manufacturing;and interest-rate spread.
Also included are the composite leading business cycle indicator of the major trading partner countries; business confidence index;and gross operating surplus as a percentage of GDP.
The positive momentum in activity suggests that quarter three GDP may grow by 0.4%, Investec chief economist Annabel Bishop said.
Bishop warned that economic growth was still expected to slow materially in 2023, to 1.3%, as global demand weakens.
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