Nigeria Business Confidence October 2016


Nigeria: Business confidence rebounds in October from September's record low

October 27, 2016

In October, the Standard Chartered-MNI Business Sentiment indicator (BSI) rose from September’s all-time low of 41.6 to 57.2. The indicator crossed the 50-threshold that separates contraction from expansion in business conditions after it fell below 50 in September for the first time in the survey’s history.

October’s improvement reflected an increase in 13 of the 15 current conditions indicators, with 10 categories recording double-digit growth. Business sentiment, new orders and production recovered strongly in October while employment and inventories were the two indicators that dropped. October’s reading suggest that business activity in Q3 will not collapse as it did in the first half of the year. Nevertheless, rising inflation and the weak Nigerian naira remain a source of concern.

Regarding economic prospects in the second half of the year, Standard Chartered analysts noted that, “we think that September was likely a blip in business confidence in Nigeria – October’s print likely indicates a return trend.”

FocusEconomics Consensus Forecast panelists expect gross fixed investment growth to reach 1.7% in 2016, which is unchanged from last month’s forecast. For 2017, panelists forecast an expansion of 1.7%, which is down 1.7 percentage points from last month’s forecast.

Author: Jean-Philippe Pourcelot, Economist

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Nigeria Business Confidence Chart

Nigeria Business Confidence October 2016

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

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