Institute for Public Policy Research

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The IJG Business Climate Monitor for April 2010

Produced by the Institute for Public Policy Research

Confidence wanes in April according to the IJG Business Climate Index

The IJG Business Climate Index’s slowed for the second consecutive month, fanning concerns about the
recovery of local business confidence. The index fell by 2.5 basis points with data pointing towards waning
confidence in all sub indices. The local leading indicator was the hardest hit, shedding 10.2 basis points in
the month as particularly weak commercial vehicle sales and metal prices hammered the sub index.
International leading indicators firmed moderately across EU, US and Japanese economies as the global
economic recovery continued. Commercial vehicle sales fell to a mere 479 units, reaching an 11-month
low. Metal prices were down 5 percent, with a stronger local currency against the US Dollar eroding
revenues a further 1 percent. Uranium prices held their ground and managed to post a 1 percent increase,
which was nullified by exchange rate fluctuations. The investment sub index fell 5.5 basis points. Available
data shows that business sector borrowings are declining, company registrations are falling and the
construction sector is struggling with 12 percent fewer building plans approved (this trend is expected to
continue for the next two months, given the lag effect of this indicator). Business sector overdrafts fell 7
percent month on month, while company registrations fell 40 percent. The consumption sub index did not
fare much better, shedding 4 basis points in April. Despite low inflation, a favourable exchange rate and
lower international fuel prices, consumer confidence appeared weak in part due to poor passenger vehicle
sales, with 327 units sold. The lower international fuel prices did not result in lower pump prices during
April. The export sub index came in 1.3 basis points lower in April on the back of the weaker metal prices.
Beef prices eased lower on light demand and higher supply on the South African market. Month on month,
all indicators were in the red, a trend which carried over to quarterly movements, thus sending the three-
month moving average into a downwards cycle, which is expected to continue well into the second quarter.

Monthly Quarterly
Mar-10 Apr-10 Q1’10 Q2’10
Business Climate Index ▼ 120.9 118.4 ▼ 122.5 118.4
Investment Index ▼ 154.5 149.0 ▼ 156.3 149.0

Incorporated Association Not for Gain Registration Number 21/2000/468

Trustees: M M C Koep, D Motinga, P Hailonga-van Dijk, G Hopwood (ex-officio), W Lindeke, A du Pisani, R C D Sherbourne
Consumption Index ▼ 95.2 91.3 ▼ 94.1 91.3
Export Index ▼ 112.8 111.5 ▼ 114.0 111.5
Leading Indicator ▼ 159.5 149.3 ▼ 162.6 149.3
Coincident Indicator ▼ 100.4 100.2 ▲ 98.4 100.9