Oil price index decreased in December 2013: IJG

WINDHOEK;  The oil price index declined from 61.2 to 56.7 points as a result of a decline in real oil prices as inflation outstripped oil price increases for December 2013.

The IJG Business Climate Monitor report for December 2013 produced by the Institute for Public Policy Research (IPPR) and issued here on Tuesday said further small declines were seen in metal and fish prices, but these were marginal.

“On the other hand, strong growth was seen in the metal price index, the exchange rate index, the diamond price index and credit extension index in December. Most notable was the exchange rate index, which went from 176.7 to 196.3 points,” the report said.

The IJG Business Climate Index declined by 7.4 index points in December 2013, falling to the lowest level seen since June 2013.

The report noted that as such, the overall index now stands at 139.6 points and the fall in the overall index, is however, not a true reflection of the general business climate in the country, as it is on account of a sizable decline in just two of the 13 indicators assessed, and simply reflects seasonality in the domestic consumption climate.

It says the decline in the index was caused by declines in vehicles sales, as well as building plans approved, due to the festive season, and thus lower demand for new vehicles for much of the month, as well as lower volumes of business plans being processed through the municipalities on account of staff taking annual leave.

The report said all of the indices except the export index declined in the final month of 2013. However, the largest declines were in the investment index, and consumption index, which fell by 20.8 and 9.6 index points respectively.

“This was due to the large declines in vehicle sales, both for passenger and commercial vehicles,” it stressed.

The export index rose by 6.1 points based on strong increases in metal prices and a depreciating exchange rate.

The report noted that as such, while the IJG Business Climate Index level of 139.6 is 7.4 index points lower than the previous months’ level, it is little cause for concern as it reflects seasonal factors rather than a strong change in trend or business confidence in the country.