Business owners express more confidence in Nigeria’s macroeconomy, says CBN survey
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
The outcome of a survey conducted by the Central Bank of Nigeria (CBN) in the month of June shows overall confidence index (CI) on the macroeconomy in June 2018 has improved from levels obtained a month earlier.
At 34.7 index points, respondents’ overall confidence index (CI) on the macroeconomy in June 2018 improved when compared with the level of 28.9 index points recorded May 2018.
Businesses outlook for July 2018 also show greater confidence in the macroeconomy at 64.9 index points.
The results released in the monthly business expectations survey report of the CBN indicates that outlook from respondents in 650 businesses nationwide on the volume of total order, business activity and financial conditions (working capital) remained positive during the review period.
The CBN says respondents expect the naira to appreciate in the current (June) and next months; inflation rate to fall in both months while borrowing rates to rise in both months.
The respondents who work in firms that cut across the services, industry, wholesale/retail trade and construction sectors, however, identified insufficient power supply, high interest rate, unfavourable economic climate, financial problems, unclear economic laws, insufficient demand and unfavourable political climate as the major factors constraining business activity in the current month.
The optimism on macroeconomy in the current month was driven more by the opinion of respondents from services which recorded 20.5 points, the industrial sector was next with 9.3 points, construction 2.6 points and wholesale/retail trade sectors 2.3 points.
Topping the drivers of optimism for the month of July remained the services sector with 37.8 points, the industrials were next with 19.5 points, wholesale/retail trade (3.9 points) and construction (3.7 points).
The survey’s results on employment and expansion indicate a positive outlook in the volume of business activities (66.7 index points) and employment (27.0 index points)According to the report, employment outlook index by sector showed that the services sector (28.7 points) has the highest prospects for creating jobs, followed by industrial (26.4 points), wholesale/retail trade (25.0 points) and construction (16.7 points) sectors.
An analysis of businesses with expansion plans by sector in the next month showed that the services sector indicates greater disposition for expansion with an index of 33.6, while construction and wholesale/retail sectors both recorded an index of 21.7.