SARB leading indicator up 4.2% y/y in May
· The South African
The South African Reserve Bank’s (SARB) leading indicator was up 4.2% year-on-year in May 2026.
Visit biznow.biz for more information.
The SARB leading indicator had been rising since April 2024. The March 2026 year-on-year increase was the highest since October 2021.
The BCI May 2026 jpg is based on data provided by the South African Reserve BankThe May indicator fell by 0.3% month-on-month after a 2.0% monthly decline in April.
The May indicator showed a mixed bag with half of the sub-indices making a positive contribution and half having a negative impact.
Positive monthly components
The largest positive contributors were accelerations in the six-month smoothed growth rates in the real M1 money supply and the number of new passenger vehicles sold.
New vehicle sales rose by 15.3% year-on-year in June. This followed a 12.8% gain in May. The June sales were the best June since 2007.
Naamsa expects 2026 sales to be between 9% and 11% higher than 2025. In the first half of 2026, sales were up 12.9% year-on-year.
The other positive factors were an increase in the volume of domestic orders received in the manufacturing sector, as well as an acceleration in the six-month smoothed growth rate in job advertisements.
Last, but not least, the percentage change over 12 months of the composite leading business cycle indicator for South Africa’s major trading-partner countries had a positive impact.
Negative monthly components
The largest negative contributors were a deterioration in the RMB/BER Business Confidence Index (BCI) and a decrease in the number of residential building plans approved.
The BCI slipped to 39 in the second quarter 2026 from 47 in the first quarter 2026. It is now back to the third quarter 2025 level.
The U.S. dollar-based commodity price index for South Africa’s main export commodities had a negative impact.
Manufacturing also had a negative contribution as the average hours worked per factory worker in manufacturing slipped.
Additionally, the interest rate spread between the 10-year government bonds and the 91-day Treasury bills also had a negative impact.