Nigeria: Business confidence hits seven-month high in July
July 31, 2015
In July, the Business Sentiment Indicator (BSI) developed by MNI Indicators and Standard Chartered jumped from June’s 60.7 to 62.2, which marked the highest level since December 2014. As a result, the indicator is resting comfortably above the 50-threshold that separates contraction from expansion in business conditions.
July’s reading reflected a marked improvement in new orders and production. On the other hand, order backlogs, employment and supplier delivery times deteriorated in the same month. Although input prices declined in July after hitting a series high in June, inflationary pressures remain high.
According to MNI Indicators and Standard Chartered analysts, “although uncertainty persists due to new oil-price weakness, fiscal pressure, and constrained FX availability, the results appear consistent with a growth recovery in H2-2015.” Regarding FX developments, analysts point out that, “in July, businesses have experienced the impact of new Central Bank of Nigeria (CBN) restrictions on imports, with FX from Nigerian markets no longer available for the importation of a number of items.”