The hope of businesses in Nigeria to employ in December 2020 and January 2021 has risen, after several months of layoffs and restructuring of businesses as a result of the harsh realities of the Coronavirus pandemic.
This was disclosed by the CBN Business Expectation Survey report for November 2020.
- Findings from the survey indicate a favourable business outlook for December 2020 and January 2021, with indices of 56.0 and 61.4 respectively.
- Businesses are also hopeful of employing in December 2020 and January 2021 as reflected in the positive outlook at 19.1 and 22.3 index points respectively.
- The wholesale/retail trade sector with (22.4 points) has the highest prospect for employment in December, followed by agric/services sector with an index of 21.7 points, construction (16.2 points), and manufacturing sector (14.3 points).
- The analysis of businesses with expansion plans in December also shows that the Wholesale and Retail sector has the highest disposition to expand with 50.0 index points, followed by the Manufacturing sector with 43.7 index points, Agric/services sector 39.5 points, Construction sector 34.5 index points.
Other key highlights
- The major factors inhibiting businesses identified by the respondent firms include an insufficient power supply (69.3 points), competition (67.3 points), unfavourable economic climate (64.3 points), high-interest rate (62.3 points), unclear economic laws (61.3 points), financial problems (59.5 points), unfavourable political climate (59.3 points), access to credit (52.0 points), insufficient demand (51.7 points), lack of equipment (39.8 points), lack of materials input (39.1 points), and labour problems(28.9 points).
- The respondent firms are expecting the borrowing rates to rise in December 2020, January 2021, next 2 months, and the next 6 months with indices of 16.2, 15.5, 17.0 and 18.6 points respectively.
- Businesses are hopeful that the average inflation rate in the next six months and the next twelve months will stand at 15.62% and 14.03 % respectively.
- Respondents anticipate an increase in economic conditions as the index on economic growth rate in the short run stood at 17.0 and 27.7, 35.2 and 46.8 points, respectively for the current month and next month next 2 months and next 6 months.
- Respondent firms are quite dissatisfied with the management of inflation by the Government, reflected with a negative net satisfaction index of -25.1points.
- Respondent firms expect the naira to depreciate in the November 2020 but appreciate in the next month, next 2 months and next 6 months, as their confidence indices stood at -3.4, 12.3, 21.8 and 35.2 index points respectively.
What you should know
- The survey is a monthly activity conducted by the Statistics department of the Central Bank of Nigeria (CBN).
- The November 2020 Business Expectations Survey was conducted from November 9-13, 2020 with a sample size of 1050 businesses nationwide with a response rate of 89.5%.
- The sectors covered include agric/services, manufacturing, wholesale/retail trade and construction sectors, made up of small, medium and large corporations covering both import-oriented and export-oriented businesses.