The latest Central Bank of Nigeria’s (CBN) monthly Business Expectations Survey (BES) report has shown that majority of respondent firms expressed optimism on macro economy in July 2019.
According to the BES report, which was posted on the apex bank’s website yesterday, majority of businesses in the country expect the naira to appreciate in the coming months.
Furthermore, the report said: “Level of inflation is expected to increase slightly in both the next six months and the next twelve months; borrowing rate is expected to rise in the current month, fall next month and increase in the next twelve months.
“At 28.1 index points, respondents expressed optimism on the overall confidence index (CI) on the macro economy in the month of July 2019. The business outlook for August 2019 showed greater confidence on the macro economy with 64.1 index points.
“The optimism on the macro economy in the current month was driven by the opinion of respondents from services (15.4 points), industrial (10.0 points), wholesale/retail trade (2.0 points) and construction (0.7 points) sectors. Whereas the major drivers of the optimism for next month were services (36.5 points), industrial (20.7 points), wholesale/retail trade (4.8 points) and construction (2.1 points) sectors.
“The positive outlook by type of business in July 2019 was driven by businesses that are neither import-nor export-oriented (19.3 points), both import-and export-oriented (4.8 points), import-oriented (3.4 points), and those that are export-related (0.7 points),” the report stated.
On financial conditions and access to credit, the report indicated that respondent firms’ outlook on the volume of total order and business activity in July 2019 “remained positive, as their indices stood at 11.8 and 13.0 points.
“Similarly, respondents were optimistic in their outlook on financial conditions (working capital) and average capacity utilization as the indices stood at 11.2 and 14.1 index points, respectively. Respondents expressed optimism on access to credit in the review month, with an index of 1.5 points.”
In addition, on employment and expansion plans, the report stated: “Respondent firms’ opinions on the volume of business activities (64.3 points) and employment (23.7 points) indicated a favourable business outlook in next month. The employment outlook index by sector showed that the services sector indicates higher employment expansion plans in the next month, with an index of (27.0 points) followed by wholesale/retail trade (21.0 points), industrial sector (20.6 points) and construction sector (5.9 points).”
However, according to the report, “the surveyed firms identified insufficient power supply (67.6 points), high interest rate (56.6 points), financial problems (55.7 points), unfavourable economic climate (55.3 points), unclear economic laws (49.3 points), insufficient demand (46.3 points), unfavourable political climate (45.0 points), while access to credit and competition had (44.8 points) respectively as the major factors constraining business activity in the current month.”