Survey envisages better business outlook in coming months
The October Business Expectations Survey Report suggests that the next six months hold brighter prospects for the economy.
The study conducted by the Central Bank of Nigeria (CBN), predicts a firmer naira in the months but passes a negative remark on access to credit.
The respondents, according to the report, say agriculture and manufacturing sectors have the highest employment prospects in November and December. They also noted construction as an area with the highest “disposition to expand” as Nigerians look forward to a more prosperous economy.
“Respondent firms’ opinions on the volume of business activities indicated a favourable business outlook for November and December 2020, with indices of 56.2 and 62.7, respectively. Businesses also hope to employ in November and December, as the outlook was positive at 19.5 and 22.5 index points, respectively.
“The overall confidence index (CI) on the macroeconomy was pessimistic in October 2020. However, respondents are optimistic in their outlook for November with a confidence index of 37.9. They also expressed optimism in the overall business outlook for December 2020 and April 2021 as shown in greater confidence of the economy at 46.1 and 59.7 index points, respectively,” CBN reports.
With a sample size of 1,050 businesses, the survey examines the outlook of agriculture/services, manufacturing, wholesale/retail trade, and construction sectors.
It notes that the respondent firms were drawn from small, medium and large corporations spanning both import-oriented and export-oriented businesses.
According to the survey, the overall confidence index of the baseline month (October) was pessimistic, while it was positive for November to April 2021.
It identifies insufficient power supply, financial problems, high-interest rate, competition, unfavourable economic climate and unclear economic laws as major business constraints.
Also listed are unfavourable political climate, poor demand, access to credit and lack of equipment.