Economy, Featured
By Anayo Ezugwu
THE Central bank of Nigeria, CBN, has expressed optimism on the overall confidence index on the country’s macro economy in the month of July. It said business outlook for the month of August showed greater confidence on the macro economy with 64.1 index points.
CBN in its July edition of monthly Business Expectations Survey, BES, published on its website, expressed optimism on the macro economy in July 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 were 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). However, the report identified insufficient power supply, high interest rate, financial problems, unfavourable economic climate, unclear economic laws and insufficient demand as major factors that constrained business activity in July. It also expected Naira to appreciate in the current month, next month and next twelve months.
“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.
“All sectors expressed optimism on own operations in the review month. Respondents from the services sector expressed the greatest optimism on own operation with an index of 8.3 points, followed by the industrial sector with 1.8 points, the wholesale/retail trade with 1.0 points and the construction sector with 0.1 points, respectively. Respondents’ 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,” it said.
On the employment outlook index by sector the report showed that the services sector indicates higher employment expansion plans 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).
The analysis of businesses with expansion plans by sector in the next month showed that the services
sector indicates higher disposition to expansion with an index of (32.4 points) followed by construction services sector (17.6 points), industrial sector (5.4 points) and wholesale/retail trade sector (1.8 points). “Respondents anticipate better economic conditions as their index of economic growth rose in the short run with an index of 33.3, 48.7 and 60.6 points for the current month, next six months and next twelve months, respectively.
“Respondent firms expressed satisfaction with the management of inflation by the Government with a positive net satisfaction index of 6.0 in July 2019. The net satisfaction index is the proportion of satisfied less the proportion of dissatisfied respondents.”
– Aug. 2, 2019 @ 15:49 GMT |
Tags: CBN expresses optimism on Nigerian macro economy
