The IJG Business Climate Monitor (BCM) Index declined for a sixth consecutive month in October, sliding by 1.2 points to 51.21.
In contrast, the Leading Indicator, which predicts the future trend, showed its strongest improvement of 2018, gaining 3.6 points to reach 47.40 points.
This is the second highest reading in 2018 after February (47.92).
“We expect the Leading Indicator to continue its upward trend. The strong performance of the Leading Indicator suggests that the IJG BCM could have reversed its downward trend in the last two months of 2018,” the Institute for Public Policy Research (IPPR) said in a report this week.
It said out of the 31 indicators used in compiling the IJG BCM, 14 dropped while 16 moved upwards with one staying flat in October.
“This was the second lowest number of indicators that declined in 2018 after 13 declined in June. While copper and gold production increased in October, diamond and uranium production dropped.
“The number of livestock marketed declined further in October, but beef and lamb prices improved. The number of vehicles sold dropped to its lowest level in almost a decade (since May 2009) and the value of building plans approved in Windhoek remained below average for 2018.”
The report said total exports picked up slightly compared to September, while total imports decreased slightly resulting in a trade surplus.
The Namibia dollar weakened against the US dollar and Euro after some gains in September.
It said credit to both individuals and private businesses rose.
“Overall, the strong improvement of the Leading Indicator suggests that the economic decline is bottoming out and the business climate is about to improve.”
The index encompasses 31 indicators, selected from available high-frequency data. These are split into five broad categories, namely: policy environment, primary sector output, secondary and tertiary output, external account, and pricing.
These categories provide the best available high-frequency insight into developments in the local economy and business cycle.