Confidence index declines to 13.6 point in July – CBN

Overall confidence index on the macro economy declined to 13.6 index point in July compared to 34.7 in June, the Central Bank of Nigeria (CBN) revealed on Monday.
The July 2018 Business Expectations Survey (BES) was carried out by the CBN in July 12-20, 2018, with a sample size of 1,050 businesses nationwide. A response rate of 94.7 percent was achieved, and the sample covered the services, industry, and wholesale/retail trade and construction sectors.
The businesses outlook for August 2018 showed more confidence on the macro economy at 58.7 index points.
The optimism on the macro economy in the current month was driven by the opinion of respondents from services (9.3 points), industrial (3.6 points), construction (0.4 points), and wholesale/retail trade (0.3 points), sectors, while the drivers of the optimism for next month were services (34.8 points), industrial (16.5 points), wholesale/retail trade (4.6 points), construction (2.8 points) sectors.
Furthermore, the positive outlook by type of business in July 2018 was driven by businesses that are neither import- nor export-oriented (7.8 points), import-oriented (2.5 points), both import- and export-oriented (2.5 points), and those that are export-related.
Businesses expressed less optimism on own operations in July 2018 when compared to the previous month. However, respondents from services and wholesale/retail trade sectors expressed relatively more optimism on own operations in the current month with indices of 0.3 and 2.7 respectively when compared with 7.6 and 0.9 reported in June 2018, respectively.
An analysis of businesses with expansion plans by sector in the next month showed that the wholesale/retail trade indicates greater disposition for expansion with an index of 31.8, followed by the services and construction sectors with 28.7 and 8.8 index points, respectively.
The surveyed firms identified insufficient power supply (64.1 points), high interest rate (58.1 points), unfavourable economic climate (54.3 points), financial problems (50.6 points), unclear economic laws (48.9 points), insufficient demand (45.1 points) and unfavourable political climate (45.1 points) as the major factors constraining business activity in the current month.