In the monthly BCI 2008-2010, there is clear indication that the there is a decrease of the BCI in the last quarter of the year 2008 to 38.4 in October and it further went down till December when it recorded 32.5. In the first quarter of the year 2009, there is an indication of increase in the BCI. The decrease in the BCI is as a result of the pessimists who speculate the down fall of the economy which varies depending on people in different regions. The western states are the most pessimists with respect to the whole economy. This is indicated by a 58% of them expecting the decreases in the economy, 68% are neutral, and finally 18% of them expected to reduce their number of employees.
The BCI is affected by the inflation in the country besides the overall declining expectations in the fluctuations in the performance of the economy. Any single digit inflation is not bad to the economy but affects the BCI positively or negatively depending on the fluctuations experienced. This effect of the BCI is mainly influenced by its sub indexes. There is also the effect of the low borrowings rate which entices the people to have confidence in their business or not. The interest rates also should be utilized in restoring the confidence in the economy since the increase or decrease of it will result in the appropriate effects on the business.
The other BCI includes the interest rates, exports and the funds from other stakeholders such as the IMF. Interest rates boost the economy by being changed so as to suite the expected confidence by the businesses. The exports increase the confidences as well since the business operations people will be challenged and encouraged by the increase in the operations.
BCI is a good tool for a manager to utilize as it indicates the exact operations of the business. This is beneficial to the manager as adequate measures are implemented which will benefit the business operations. This involves the relationships of the economy in relation to the business operations. This enables the manager to know the extent the economy affects the overall outcome or operations of the company. BCI is very useful to the manager in making appropriate decisions about the steps or interventions to be made in future which will ultimately benefit the company. The use of BCI may not be good to the manager as most of the sub-index influences it and may be of great influence to the company operations.
The best business index is that of the inflation single digit. This is because the overall performance of the economy relies on the inflation rate. There should also be concentration on the creation of more jobs since it will boost the economy significantly and establishes confidence. This will directly affect the business confidence hence it’s the best BCI.