The IJG Business Climate Index (BCI) shed 9,2 basis points in December, dropping for a second consecutive month, dropping 16,7 basis points in total since November.

Businesses invested less during December largely due to fewer building plans being completed because of the construction holiday that begins on the December 10, the Institute of Public Policy Research (IPPR) said releasing the latest BCI.

Commercial vehicle sales also contributed, the IPPR said, as 19% fewer commercial vehicles were sold. Although credit to business rose 30% year-on-year, it was mostly unsecured lending in the mining, energy and retail industries to finance day-to-day operations and not investment in machinery and equipment. "Consequently, the Investment Index fell by 17 basis points," the IPPR said.

"The future does not look too bright either as the leading indicator took yet another knock, shedding almost ten basis points on the back of lower investments."

The Consumption Index, an indicator of consumer confidence, shed 3,7 basis points due to decreased passenger vehicle sales, which dropped 14% month-on-month. The IPPR noted that December is usually a bad month for passenger vehicle sales.

The export sector bucked the negative trend during December, with the Export Index rising 2,4 basis points.

Metal prices fell 0,4%, while fish prices remained unchanged. But favourable exchange rates translated into higher prices for both metal and fish exporters.

Beef prices rose by 6% due to strong weaner calf prices while mutton prices were down due to softer demand, the IPPR said.