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By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) revealed yesterday that business confidence remained robust in October, providing a counterpoint to the recent PMI (Purchasing Managers’ Index) report from Stanbic IBTC.
According to the bank’s Business Expectation Survey for the month under review, it revealed that businesses were generally optimistic about the economic outlook, reporting a high level of confidence in the month.
This contrasts with Stanbic IBTC’s PMI report, which may have indicated a more cautious sentiment in the private sector. Typically, the PMI is a measure of the manufacturing and services sector’s performance and serves as an economic health indicator.
On the other hand, the business expectation survey is a monthly survey of leading firms drawn from business establishment updated frames of CBN and the National Bureau of Statistics (NBS). Its results provide advance indication of change in the overall business activity in the economy.
The bank stated that the survey was conducted from October 7 to 19, 2024, with a sample size of 1,750 business enterprises across Nigeria. It achieved a response rate of 98%, covering key sectors which include industry, services and agriculture.
Although the apex bank noted that respondents firms mentioned high interest rates, insecurity and multiple taxes among others as top business constraints in the reporting month, it said that the overall confidence index on the macro-economy indicates that businesses were optimistic.
It also revealed that the volume of business activity in most sectors except for the industry sector expressed positivity and added that the overall capacity utilization was effective for the month under review with mining and quarry, electricity, gas and water supply being the most positive.
Speaking on the outlook for the month of November, the CBN said that respondent firms were optimistic that the volume of business activities in November 2024, January and April 2025 would be favourable.
“According to the survey, in line with the favourable expectations, businesses hope to employ more workers in November 2024 except for the construction sector as an analysis of the sectors showed that Agriculture had the highest prospect for employment and expansion this month.
Also, respondents firms expect the naira to depreciate in the current month, next month and next 3 months. However, they expect appreciation in the next 6 months”.
When the CBN suggests higher confidence than other reports, it may indicate differences in methodology, data sources, or assessment criteria used in their analyses. This divergence in outlook can reflect varying perceptions of inflation, currency stability, and policy impacts on business conditions.
