WINDHOEK - The IJG Business Climate Index slipped 1.2 basis points in June. The local leading indicator was worst hit shedding 4.8 basis points due to the low number of building plans approved and reduced commercial vehicle sales.
According to the Institute for Public Policy Research (IPPR), business confidence in the fourth quarter is expected to be lower than in the same period last year.
The investment index also fell, but this time by 2.9 basis points, due to the lower number of construction plans completed, as well as lower commercial vehicle sales and a slowdown in credit extended to the business sector.
The single largest type of business loan, namely overdrafts, fell 7 percent month on month, while construction plans completed three months ago fell dramatically with a mere N$29 million worth of construction work completed.
The export index slipped by a basis point to its lowest level in almost three years, although the June decline was largely due to falling fish prices since small hake and monkfish prices both fell by 15 percent month on month.
Although metal and meat prices were somewhat firmer, they merely cushioned the fall of the export index. The consumption index continued to improve for the second consecutive month to reach its highest level since January 2006, after increasing by 3.8 basis points.
Lower international fuel prices, lower inflation and a favourable interest rate environment, which is encouraging the purchase of more passenger cars on credit, boosted consumer demand.
Passenger vehicle sales grew 11 percent month on month, while consumer credit rose 2 percent month on month. Local pump prices decreased by 27 cents for unleaded and 12 cents for diesel fuel.
Consumer confidence has been highly volatile and has struggled to gain any sort of momentum over the past four years and there are still inflationary concerns regarding food and housing utilities.
Overall business confidence declined in the second quarter.