GKI's headline confidence index rose from -9.6 in February to -7.1 in March. The index is now at its highest position for three years and up on last year's March reading of -19.6.
The improvement in confidence was driven by business sectors, which have been showing steady improvement since the end of last summer.
GKI's Business confidence index was at a 21 month high in March at -5.4, compared to -9.4 in February and -17.4 one year ago.
Consumer confidence was down, however, falling from -10.3 in February to -11.8 March.
Consumer confidence got off to a shaky start to 2006 after strong improvement in the second half of last year. Consumer confidence was as low as -26.0 one year ago.
GKI says that the improvement in business confidence was driven by positive outlook in industrial and construction sectors based on order stock. Outlook on export growth declined somewhat, though.
GKI believes that consumers are expecting a slight worsening of their financial position over the next 12 months on inflation worries. This has lead to decline in consumer spending and saving expectations, GKI says.
