Nigeria Business Confidence


Nigeria: Business confidence declines in June

June 30, 2015

In June, the Business Sentiment Indicator (BSI) developed by MNI Indicators and Standard Chartered fell from May’s 61.4 to 60.7, which marked the lowest level in four months. Nevertheless, the indicator is resting comfortably above the 50-threshold that separates contraction from expansion in business conditions.

June’s reading reflected a slight deterioration in new orders and order backlogs. On the other hand, production and job conditions remained strong in the same month. Meanwhile, input prices climbed to a series high in June, mainly due to the weakening of the naira, which boosted prices for imported goods. On the other hand, despite a weak currency, export orders declined again in June.

According to MNI Indicators and Standard Chartered analysts, companies point to low availability of U.S. dollars, which is hurting business, and stress that this situation will not change in the near future. Although data suggest that, “post-election euphoria is starting to fade,” growth is likely to pick up in the second half of the year as, “businesses remain optimistic on the likelihood of an economic turnaround.”

FocusEconomics Consensus Forecast panelists expect gross fixed investment growth to reach 5.1% in 2015, which is down 0.4 percentage points from last month’s forecast. For 2016, panelists forecast an expansion of 6.1%.

Author: Ricard Torné, Lead Economist

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Nigeria Business Confidence Chart

Nigeria Business Confidence June 2015 0

Note: Business Sentiment Indicator. Readings above 50 indicate an expansion in business conditions while readings below 50 point to a contraction.
Source: MNI Indicactors and Standard Chartered.

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