CBN’s businesses outlook for May shows greater confidence on macro economy

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Nigeria’s central bank’s businesses outlook for May 2018 shows a greater confidence on the macro economy at 66.9 index points.

Even as activities rose on improved confidence on macro economy as the overall confidence index (CI) rose to 28.9 in April compared with the level of 24.5 index points recorded in March 2018, according to the Central Bank of Nigeria (CBN).

The optimism on macroeconomy in the current month was driven by businesses from the various sectors including services (18.0 points), industrial (7.6 points) construction (2.7 points) and wholesale/retail trade sectors (0.7), while the drivers of the optimism for next month were services (42.1 points), industrial (18.0 points), construction (3.7 points) and wholesale/retail trade.

The business expectation survey report revealed that the positive outlook by type of business in April 2018 was driven by businesses that are neither import- nor export-oriented (20.0 points), import-oriented (4.5 points) both import- and export-oriented (3.9 points), those that are businesses export-related (0.7 points).

The surveyed firms identified major factors constraining business activity in the current month. These include insufficient power supply (69.6 points), high interest rate (60.2 points), unfavourable economic climate (52.7 points), unclear economic laws (50.9 points), financial problems (50.7), unfavourable political climate (46.7 points), and insufficient demand (46.4 points).

The April 2018 Business Expectations Survey (BES) was carried out by the CBN during the period April 13-23, 2018 with a sample size of 650 businesses nationwide. A response rate of 91.7 per cent was achieved, and the sample covered the services, industry, wholesale/retail trade and construction sectors.

Respondents’ outlook on the volume of total order, business activity and financial conditions (working capital) stood at 18.5, 17.2, and 8.5 index points respectively, indicating an improvement in relation to its outlook in March 2018 which was 13.3, 16.0, and 7.6 respectively.

The average capacity utilization (CUI) index rose to 20.0 points in April 2018 from 16.5 in March 2018, which can be attributed to the positive outlook on business activity and financial conditions.

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