The South African Reserve Bank (SARB) said its composite leading business cycle indicator, a method used to forecast turning points in the business cycle, edged up 0.1% m/m in May after staying flat in April. The indicator, which gathers data such as vehicle sales, job advertisements, business confidence, manufacturing orders and money supply to estimate the economic outlook, was 99.6, its lowest level since September 2012. It was by 1.2% lower compared to May 2013, following a 1.5% y/y fall in April.

The central bank said that 6 of the indicator’s 11 component time series that were available for May worsened, 4 improved and one remained unchanged. The largest negative contributions came from a decline in the volume of manufacturing orders and a decline in the average hours worked in the manufacturing sector. On the opposite, the main positive contributors were an acceleration in the y/y percentage change in job advertisement space, followed by an increase in the number of residential building plans passed.

SARB’s composite coincident business cycle indicator, which provides information about the current state of the economy, increased by 0.9% m/m and by 3.7% y/y in April.

The composite lagging business cycle indicator improved by 2.0% m/m and by 1.3% y/y in April. Lagging indicators usually change after the economy as a whole does with the typical lag being several quarters.