The SACCI Business Confidence Index (BCI) improved by 0.9 index points in March 2014 to 92.7, after clawing back 1.4 index points in February 2014. The March 2014 BCI of 92.7 is 2.3 index points higher than the 90.4 of March 2013. It is the first time since June 2011 (33 months ago) that the BCI is at a better level than the corresponding month of the previous year.

After the majority of sub-indices (six) of the BCI improved between January and February 2014, two more indices turned positive in March 2014, while three indices remained unchanged.

The seven year-over-year negative readings in March 2014 is an improvement over the nine year-over-year negatives of February 2014. Four sub-indices were positive year-over-year and two were unchanged in March 2014. Important sub-indices on real economic activity continued to improve in February with only export volumes declining from a high level in January 2014.

The financial sub-indices had an even stronger positive impact as four of the six sub-indices turned positive in March 2014 against two in February 2014.

SACCI is concerned about the consumer going through a difficult period and experiencing stress from various sources; this debilitates the consumer-business partnership that underpins greater levels of economic activity.
Unemployment, rising interest rates, rising debt, and inflation are among the issues adversely impacting consumers and business alike. Some 15% of total consumer revenue is derived from own businesses and this revenue stream is dependent on a positive business climate and improving real consumer demand.

The relative level of debt together with the cost of servicing debt is a growing challenge in the economy. Claims against households by the banking sector increased by 24% in 2006 and 19% in 2007. This contributed to the elevated debt levels of 2008, which have since remained high, and was at 75% of disposable income in 2013. Servicing such debt levels, in a possible rising interest rate environment, is an often underestimated pressure on households.

There are no signs at this stage that the approaching national election is impacting the business psyche. The outcome of the election and the policy positions taken thereafter will no doubt have a profound impact on business confidence as would the emergence of a stronger consumer market and global geo-political developments.