Uptick in business confidence

The CBN’s latest Monthly Business Expectations Survey Report for August 2018 shows the business confidence index at 21.5 points, indicating improved optimism on the economy when compared with 13.6 recorded in July. The survey had a sample size of 1,050 businesses covering services, industry, wholesale/retail trade and construction. A response rate of 97.9% was achieved. This latest survey still points to a stable macroeconomic outlook. However, when compared to the projection of 58.7 it reflects a more cautious stance from respondents.


  • The optimism in August was driven by the opinion of respondents from the services (13.7 points) and industrial (6.1 points) sectors while those from the construction and wholesale/retail trade sectors represented just 0.8 and 0.9 points respectively of the total.


  • Similar to July, respondents remained pessimistic on access to credit as the sub-index posted a contraction of -1.0 compared with -3.5 in July. Banks continue to maintain a cautious approach towards lending to the private sector, to avoid growing non-performing loans.


  • Asides from access to finance, the survey identified insufficient power supply as the major constraining factor to business activities in August. We applaud the authorities for their continuing efforts to improve the country’s business environment. However, structural issues also need to be addressed.
Business confidence index

Sources: CBN; FBNQuest Capital Research

·         The survey pointed to a positive outlook for employment. The services, wholesale/retail trade and construction sectors have the best prospects for job creation at 27.5, 22.0 and 20.5 points respectively. For the latter, optimism could be linked to capital releases from the national budget.

·         For September, we expect business confidence to remain positive. However, demand remains soft and this could have a negative impact on overall business confidence.



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