The Central Bank of Nigeria (CBN) has released its Business Expectation Survey which provides an outlook for business operation in December 2020 and January next year. The survey showed business constraints of sectors that are expected to employ the most and expand within this month and next month.
According to the CBN BES November report, wholesale/retail trade sector topped the list of pessimistic sector expecting an improvement in business operation following disruption to revenue generation by the COVID-19 pandemic is the first and second quarter of this year.
The survey covered various firms which commented on employment, expansion, business constraints, exchange rates, borrowing and inflation rates, as well as economic growth rate during the period of the outlook.
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- Respondent firms’ opinion on the volume of business activities indicated a favourable business outlook for December 2020 and January 2021 respectively. Businesses also hope to employ in December 2020 and January 2021 as the outlook was positive.
- The break down by sector showed that the wholesale/retail trade sector has the highest prospect for employment in the next month, followed by Agric/services sector, construction and manufacturing sector.
- Respondents were also optimistic about the volume of business activity and employment outlook index in the next 6 months as all indexes were positive.
- An analysis of businesses with expansion plans in December showed that the Wholesale and Retail sector has the highest disposition to expand, Manufacturing sector comes next, then Agric/services sector and construction sector
- Respondent firms identified insufficient power supply, competition, unfavourable economic climate, high-interest rate, unclear economic laws, financial problems, unfavourable political climate, access to credit.
- Other constraints are insufficient demand, lack of equipment, lack of materials input and labour problems as major factors constraining business activity in the current month.
- Respondent firms expect the naira to depreciate in the current month but appreciate in the next month, next 2 months and next 6 months.
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- Respondent firms expect borrowing rates to rise in the current month, next month, next 2 months and the next 6 months.
- Firms expect the average inflation rate in the next six months and the next twelve months to stand at 15.62 and 14.03 per cent respectively.
- Respondents anticipate an increase in economic conditions for the current month and next month, next 2 months and next 6 months.
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