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JOHANNESBURG - The South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) declined by 1.3 index points from 98.9points in February to 97.6points in March.

The decline marked a second consecutive month that the BCI fell from the 99.7points multi-year high it reached in January.

But the index remained 3.8points higher compared to above the BCI level of March last year.

Sacci said the year-on-year improvement in March was the result of eight of the 13 sub-indices that improved and two that were unmoved.

One of the six financial sub-indices had an annual negative impact on the BCI while two activity sub-indices had negative annual effects on the BCI last month.

Old Mutual head of economic research Johann Els said the country still needed to see a clear structural policy to support and a further confidence boost created by the appointment and subsequent actions of President Cyril Ramaphosa since February.

“The risk is that we rest on our laurels, given the current renewed confidence in the market, but without follow-through, this confidence will quickly fall again,” Els said.

Sacci said the largest positive annual contributions to the business climate were from lower inflation, increased merchandise import volumes and new vehicle sales.

Sacci economist Richard Downing said the current positive climate and momentum of business confidence should be supplemented by tangible results.

“The improved business mood is still present, but a need appears to be backed up by an improvement in the real economy and further improving financial conditions,” Downing said.

“The direction of most of the business climate indicators is still positive, but the momentum appears to have slowed.”

Meanwhile, the Standard Bank South Africa purchasing managers index (PMI) edged down to 51.1points in March from 51.4points in February, indicating a slightly slower growth in private sector activity.

All PMI sub-indices remained in the expansionary territory with employment at 51.2points, followed by output recording 51points and new orders at 50.9points.

Standard Bank said business activity increased for the second month as client demand strengthened and job creation was the highest in seven months.

Thanda Sithole, an economist at Standard Bank, said the economy-wide PMI should continue to reflect signs of improving domestic business conditions over the near term.

"This is premised on the improved political landscape," Sithole said.