Nigerian businesses are showing optimism in the macro economy as they are seen to expand in the next survey month driven by the services sector at 42.9 index points.
The central Bank of Nigeria (CBN) on Friday, released its Business Expectation Survey (BES) for the month of January, which revealed that at 25.9 index points, respondents expressed optimism on the overall confidence index (CI) on the macro economy in January 2019.
The businesses outlook for February 2019 showed greater confidence on the macro economy with 62.1 index points.
Biodun Adedipe, founder and Chief Consultant of B. Adedipe Associates, said his 2019 macroeconomic expectations that the external sector is growing strongly, except for the great influence of hydrocarbons in foreign earnings.
The BES was carried out during the period January 14-18, 2019 with a sample size of 1050 businesses nationwide. A response rate of 94.8 per cent was achieved, and the sample covered the services, industry, wholesale/retail trade, and construction sectors.
The respondent firms were made up of small, medium and large corporations covering both import- and export-oriented businesses.
In the BES report, the optimism on the macro economy in the current month was driven by the opinion of respondents from services by 13.0 points, industrial 10.9 points, wholesale/retail trade 1.5 points and construction sectors 0.5points. Whereas the major drivers of the optimism for next month were services (35.0 points), industrial (20.0 points), wholesale/retail trade (5.4 points) and construction sectors 1.7 points.
The positive outlook by type of business in January 2019 were driven by businesses that are neither import- nor export-oriented at 17.6 points, both import- and export-oriented 4.2 points, import-oriented 3.5 points and those that are export-related 0.6 points.
However, the surveyed firms identified insufficient power supply by 61.6 points, high interest rate 60.0 points unfavourable economic climate 55.3 points, unclear economic laws 53.5points, financial problems 52.9 points, unfavourable political climate 50.8 points, insufficient demand 45.7 points and competition 44.2 points as the major factors constraining business activity in the current month.
Meanwhile, Majority of the respondent firms expect the naira to appreciate in the current, next and the next twelve months respectively as their confidence indices stood at 23.0, 31.9 and 44.6 points.
Respondent firms expect borrowing rates to rise as the confidence indices stood at 20.0 points in current month, 6.7 point next month and 7.6 points in the next twelve months.
Respondents’ expectation of inflation rate in the next six months and twelve months in January stood at 11.7 and 11.6 percent respectively.
HOPE MOSES-ASHIKE
