A survey has revealed a positive outlook in the volume of business activities of firms in the country for this quarter. According to the study, this implies improved prospects for employment in this quarter.
The sector with the highest prospect for employment according to the survey was the services sector followed by wholesale/retail trade, industrial and construction. The respondent firms however emphasised that insufficient power supply was the major factor that constrained business activity in the first quarter of 2015. Other constraining factors were high interest rate, financial problems, competition, unfavourable economic climate and unfavourable political climate.
The Central Bank of Nigeria (CBN) stated this in its latest Business Expectations Survey (BES) for the first quarter of 2015. The survey was carried out between February 2—13, 2015 with a sample size of 1,900 business enterprises nationwide.
A response rate of 98.9 per cent was achieved, and the sectors covered during the exercise included industry, construction, wholesale/retail, trade and services.
Respondents were drawn from the industrial, construction, wholesale/retail trade and services sectors made up of: financial intermediation, hotels and restaurants, renting and business activities and community and social services.
Furthermore, the study showed that respondent firms were optimistic on the macro economy as they anticipated business condition in Nigeria would improve in the first quarter of 2015. The optimism then, was driven by the opinion of respondents from the services sector (7.2 points), followed by wholesale/retail trade (4.1 points) and industrial (1.6 points).
Respondents’ optimism in the volume of total order and the internal liquidity position, buoyed the volume of their business activities in the current quarter. Similarly, the positive outlook in access to credit by the majority of firms upped the financial condition of firms in the review quarter.
“Respondent firms expect the naira exchange rate to depreciate in the current and next quarters. They also expect inflation and borrowing rates to rise in both the current and next quarters. The overall response rate for the quarter, at 97.9 per cent, was 0. 4 percentage point below the level attained in the previous quarter.
“A breakdown of the responses received by type of business showed that the ―neither importer nor exporter‖ category of the respondents accounted for the highest (76.3 per cent) followed by the ―importer‖ (14.1 per cent), ―both importer and exporter respondents accounted for 8.2 per cent, while 1.4 per cent represented the exporter category,” it stated.
The report further revealed that the overall confidence index (CI) which stood at 8.4 index points indicated the respondent firms’ optimism on the macro-economy.
“At 46.4 points, the overall CI for next quarter indicates that the respondents expect that the macro economy would improve. The drivers by size of business for the optimism on the macro economy in the current quarter are the small, medium and large firms whose contributions are 6.3, 1.3 and 0.7 per cent, respectively.
“The percentage distribution of respondent firms by employment size shows that small size firms constitute the highest percentage of responses (78.6 per cent), followed by medium size firms (14.2 per cent), and large size firms ( 7.2 per cent),” it added.
