Nigeria: Business confidence inched up to five-month high in May
May 28, 2015
In May, the Business Confidence Indicator (BSI) developed by MNI Indicators and Standard Chartered inched up from April’s 61.0 to 61.4, which marked the highest level since December 2014. Consequently, the indicator is resting comfortably above the 50-threshold that separates contraction from expansion in business conditions.
May’s reading reflected a strong improvement in production as well as in order backlogs. On the other hand, despite remaining robust, new orders experienced softened in May. Meanwhile, input prices climbed to a series high in May, mainly due to the weakening of the naira, which boosted prices for imported goods. On the other hand, despite a weaker currency, export orders moderated in May.
According to MNI Indicators and Standard Chartered analysts, May’s result reflects improving business sentiment as a result of the peaceful transition of power following the March general election. That said, downside risks to growth remain elevated due to a decline in grid capacity and shortage of foreign currency.