Firms Optimistic about Economic Growth, Survey Reveals
The Central Bank of Nigeria’s (CBN) Monthly Business Expectation Survey for September 2018, has revealed that business operators were optimistic about the growth in the macro economy last month, compared with the previous month.
The report which was posted on the central bank’s website also revealed that firms anticipated that the naira would appreciate.
In addition, they stated the business operators highlighted hindrances affecting the firms and businesses.
The report showed that: “At 24.8 index points, respondents’ overall confidence index (CI) on the macro economy in September 2018 was more optimistic when compared with the level of 21.5 index points recorded in August 2018.
“The businesses outlook for October 2018 showed more confidence on the macro economy at 64.5 index points.
“The optimism on the macro economy in the current month was driven by the opinion of respondents from services (16.2 points), industrial (6.0 points), wholesale/retail trade (1.9 points) and construction sectors (0.6 points), whereas the drivers of the optimism for next month were services (38.3 points), industrial (18.8 points), wholesale/retail trade (4.9 points) and construction (2.5 points) sectors.”
The positive outlook by businesses in September 2018, according to the report, were driven by businesses that were “neither import- nor exportoriented (17.8 points), both import- and export-oriented (3.6 points) import-oriented (2.8 points), and those that are export-related (0.6 points).”
On financial condition and access to credit, it stated that respondents’ outlook on the volume of total order and business activity in September 2018 remained positive, as the index stood at 16 and 15.2 points, respectively when compared to 9.1 and 10 points, respectively recorded in the previous month.
Similarly, respondents’ outlook on financial conditions (working capital) and average capacity utilisation improved, as the indices stood at 11.6 and 18.3 index points, when compared with the 8.4 and 15.9 points, respectively recorded in August 2018.
However, respondents were pessimistic on access to credit in the review month, with an index of -0.7 points.
The report added: “The positive outlook in the volume of business activities (70.4 index points) and employment (24.4 index points) indicated a favourable business outlook in the next month.
“The employment outlook index by sector showed that the services sector (27.7 points) reported the highest prospects for creating jobs, followed by industrial (21.1 points), wholesale/retail trade (17.8 points), and construction sector (16.2 points).
Furthermore, it added: “The analysis of businesses expansion plans by sector next month showed that the services sector indicates greater disposition for expansion with an index of 24 index points followed by construction and wholesale/ retail trade sectors with 18.5 and 16.7 index points 3.4.”
However, in terms of business constraints, the survey stated the firms identified insufficient power supply (65.9 points), high interest rate (54.9 points), unfavourable economic climate (53.6 points), financial problems (51.6 points), unclear economic laws (47.1 points), unfavourable political climate (46.9 points), insufficient demand (44.5 points) and access to credit (40.4 points) as major factors constraining business activity in the current month.