Nigeria: Business confidence plunges to record low in September
September 30, 2016
In September, the Standard Chartered-MNI Business Sentiment indicator (BSI) dropped from August’s 55.1 to a record low of 41.6. For the first time in the survey’s history the index signaled worsening operating conditions for firms, as it fell below the 50-threshold that separates contraction from expansion in business conditions. The drastic fall in confidence comes in a context of shrinking GDP in Q1 and Q2.
September’s deterioration was broad-based, reflecting a decline in 14 of the 15 current conditions indicators and 10 of the 15 future expectations indicators. Production and new orders fell strongly. Backlogs of work and suppliers’ delivery times also fell, albeit to a lesser extent, while employment improved.
Concerning economic prospects in Q3, Standard Chartered analysts noted that, “the quarterly print for Q3 represents the lowest quarterly average since the series began in early 2014. While it does not on its own guarantee a third straight contraction in y/y GDP growth, the results suggest that policy makers should pay more urgent attention to economic revival plans. Some signs of turnaround are evident, in our view. […] Nonetheless, there are still signs of significant weakness that require urgent policy attention.”