South Africa Leading Index Drops 0.9% MoM in July

South Africa’s composite leading business cycle indicator fell by 0.9% month-over-month in July 2026, following a revised 1.0% drop in the previous month. Six of the 10 available component time series declined, outweighing increases in the remaining four. The largest negative contributions came from a slowdown in the six-month smoothed growth rate of real M1 money supply and a decline in residential building plans approved. The biggest positive contributors were an acceleration in the six-month smoothed growth rate in job advertisements and a widening of the interest rate spread. Meanwhile, the coincident business cycle indicator edged down by 0.1% in June, mainly due to lower real wholesale, retail and motor trade sales, while the lagging indicator rose by 0.2%.

The composite leading business cycle indicator in South Africa dropped by 1.4% month-over-month in June 2026, accelerating from a 0.3% decrease in the previous month. This marked the third consecutive month of decline, primarily driven by lower US dollar-denominated prices for South Africa’s main export commodities and a slowdown in the six-month smoothed growth rate of real M1 money supply. Five of the seven available component series decreased, outweighing gains in residential building plans approved and the six-month smoothed growth rate in job advertisements. Other negative contributors included fewer new passenger vehicle sales, a narrower interest rate spread between 10-year government bonds and 91-day Treasury bills, and weaker leading indicators for South Africa’s major trading partners. Meanwhile, the coincident business cycle indicator fell 0.2% in May, while the lagging indicator increased 0.9%.

The composite leading business cycle indicator in South Africa fell by 0.3% month-over-month in May 2026, easing from an upwardly revised 2.0% decline in the previous month. This marked the second consecutive monthly contraction, with weakness in five of the ten available component time series, while the other five provided support. The largest negative contributors included weaker business confidence, fewer building plans approved for flats, townhouses and larger houses, and a decline in the commodity price index for South Africa’s main export products. Additional pressure came from shorter average hours worked per factory worker in manufacturing and a narrower interest rate spread between 10-year government bonds and 91-day Treasury bills. Meanwhile, support came from gains in real M1 money supply growth, new passenger vehicle sales, domestic manufacturing orders, job advertisements, and the composite leading business cycle indicator for South Africa’s major trading partners.