Business climate index rebounds in January

Home Business Business climate index rebounds in January

WINDHOEK – The IJG Business Climate Index, produced by the Institute for Public Policy Research (IPPR), expanded once again in January, following a slight decline in December due to seasonal factors, and the current business environment and outlook, remain very positive.

The latest report, which was released yesterday indicate that the IJG Business Climate Index expanded by 4.7 index points in January 2014 following a decline of 8.5 points the previous month. As such, the overall index now stands at 148.8 points. The increase in the index is on account of a large number of index components that expanded by relatively small amounts. Nine of the fifteen sub-indices increased, while one remained unchanged and the remainder declined. The report states that a strong start to the 2014 rainfall year, following poor rains in 2013, meant that farmers held back on stock sales through January, and as such meat prices increased substantially, boosting the meat price index by some 5.5 points. At the same time, as a result of the sizable depreciation of the Euro against the Namibia dollar through December and January, the Euro exchange rate index expanded by 5 points.

Following a seasonal decline, vehicle sales rebounded from 1.190 units in December to 1.499 units in January. Finally, increases in global oil prices drove an increase in the average oil price index of 1.7 points in January. On the negative side, declining commodity prices for zinc and copper resulted in a slight softening of the metal price index, from 124.4 points to 121.7 points. Additionally, the companies index saw a significant decline, from 657.7 points in December to 522.5 points in January, while the building index declined by 2.9 points in the same period.

The Investment Index, Consumption Index, Export Index and the Leading and Coincident Indicators all showed increases in January. The strong expansion in the leading indicator bodes well for business in Namibia over the next six months, while the rise in the export index indicates a positive external environment for Namibia’s exports, despite the witnessed decline in mineral prices. The Business Climate Index is based on 13 broad economic indicators that are likely to impact on the domestic business environment. All indicators have the same weight except for company registration data, which has a significantly lower weight to reduce its volatility on the overall index. Data is collected on each indicator on a monthly basis.


By Staff Reporter