Business Climate Stutters On Drop in Building Plans Approved

THE IJG Business Climate Index declined, albeit marginally, in July, following a decline in the value of building plans approved on a monthly basis, the Institute of Public Policy Research (IPPR) said in a report yesterday.

Following an expansion of 4,2 points in June, the index declined by 0,5 points in July. As such, the index now stands at 149,9 points, a notable increase of 4,9% when compared to the level seen in July of 2013.

The report said the slight downward movement in the index in July was primarily on account of a decline of N$104 million in the value of building plans approved during the month, relative to June.

“This value of building plans approved was the lowest seen in the past 12 months. However, this is expected to be transitory with approvals picking up again next month.

During the month under review, a major increase in company registrations was witnessed, both for closed corporations and defensive names,” the IPPR said.

This increase is likely to be on account of improved administration of company registrations following the launch of the Business and Intellectual Property Authority by the Ministry of Trade and Industry.

The report said this increase in company registrations speaks to the current positive business climate in the country, and is a positive leading indicator for business activity over the next year.

Additionally, vehicle sales once again hit record levels in July, the fourth such event in 2014, with 1919 vehicles sold during the month.

“This g growth in vehicle sales was one of the key drivers prompting the Bank of Namibia to hike interest rates by 0,25% in August in order to dampen vehicle import levels and protect the country’s reserves,” the report said.

It said while notable developments were seen in these indicators, the majority of the remaining indicators witnessed little change through July. The current business climate remains positive, on account of expansive fiscal and monetary policy and the on-going construction boom in the country, the report said.

Source : The Namibian