Comments on the SARB leading indicator
Prieur du Plessis (November 11th, 2009) Writes:
By Cees Bruggemans, Chief Economist FNB.
The SARB leading indicator peaked at 127.2 in March 2007, thereafter declining for two years, initially gradually during 2007 but acquiring freefall proportions in 2008.
This indicator hit a cyclical low of 105.3 in March 2009, thereafter rising very rapidly to 112.5 by August 2009.
Given the events of 2008 and early 2009, there presumably exists no surprise regarding the indicator’s freefall in 2008. But what has made it rise so phoenix-like rapidly since March this year?
As per the June 2007 issue of the SARB Quarterly Bulletin, this leading index today is a composite of twelve individual time series which together offer superior forward-looking ability regarding the South African business cycle, leading turning points by some six to nine months.
The twelve time series can be grouped in four distinct sub-categories, each making a peculiar contribution to the behaviour of the composite
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