The Business Expectations Survey report for December 2020 released by the Central Bank of Nigeria (CBN), indicates that businesses hope to employ in January and February 2021, with positive indices of 18.5 and 21.5 index points respectively and that of the next six months looking good.
According to the report, the opinion of the respondent firms is that the volume of business activities indicated a favourable business outlook for January and February 2021 with indices of 47.7 and 55.0 respectively.
The Agric/services sector presents the highest employment prospects with (20.5 points) in the next month, followed by construction sector with an index of 17.9 points, manufacturing sector (16.7 points), and wholesale/retail trade (13.4 points).
Other Key highlights of the report
- Agric/services sector and construction sector have the highest disposition to expand with 52.9 index points each, followed by Manufacturing and Wholesale/retail sectors, which had indexes of 46.6 and 41.2 respectively.
- Respondents from agric./services, manufacturing and construction sectors expressed optimism on own operations in the review month with confidence index of 3.2, 2.5, and 0.2 respectively. However, wholesale/retail trade sector was pessimistic at -0.3 index points.
- Insufficient power supply (68.3), unfavourable economic climate (65.7), competition(64.8), high interest rates ( 64.5), unclear economic laws (62.7), financial problems (61.9), unfavourable political climate (59.4), access to credit (53.1), insufficient demand (49.3), lack of equipment (41.5), lack of materials input (41.1) and labour problems (27.87) were identified as the key factors constraining business activities in the current month.
- Respondent firms expect the naira to depreciate in the current month and next month but appreciate in the next 2 months and next 6 months, as their confidence indices stood at -24.1, -3.8, 9.9 and 30.5 index points respectively.
- Businesses are expecting that borrowing rates would rise in the current month, next month, next 2 months and the next 6 months with indices of 19.2, 14.9, 14.7 and 14.3 points respectively.
- The expectation of most firms is that the average inflation rate in the next six months and the next twelve months would stand at 13.24 and 14.51 points respectively.
- In regards to the control of inflation by the government, respondent firms expressed dissatisfaction with the management of inflation rate by the Government, with a negative net satisfaction index of -33.5 in December 2020.
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What you should know
- The survey was conducted online by the Statistics Department of CBN from December 7-11, 2020.
- A random sample size of 1,050 businesses were taken nationwide, with a response rate of 91.3%
- The sample covered the agric./services, manufacturing, wholesale/retail trade and construction sectors.
- The respondent firms were made up of small, medium and large corporations covering both import-oriented and export-oriented businesses.
Why this matters
COVID-19 pandemic dealt a big blow on the fragile labour market with many people laid off from their jobs, as most businesses could no longer cope with the harsh economic realities.
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Hence, this is good news and big relief as many Nigerians that were laid off from their jobs can now pick up new jobs that would bring the required succour to their homes and families in the new year.