Manufacturing Recovery Lifts Business Confidence Index to 104.6pts — NESG

The Nigerian Economic Summit Group (Nigerian Economic Summit Group) has reported an improvement in business confidence in May 2026, driven largely by a rebound in the manufacturing sector and sustained consumer demand despite ongoing cost pressures.

According to its latest Business Confidence Monitor (BCM), the Current Business Performance Index rose to 104.6 points in May 2026, up from 102.1 points in April, indicating a modest expansion in economic activity across key sectors of the Nigerian economy.

However, the report noted that the latest figure remains below the 109.8 points recorded in May 2025, suggesting that while business conditions are improving, overall growth remains fragile amid persistent structural and macroeconomic challenges.

A sectoral breakdown showed that manufacturing recorded the strongest performance during the period under review. The sector’s index rose significantly to 114.1 points in May from 98.7 points in April, marking a return to expansion territory and signaling improved production activity.

The services sector also recorded improvement, with its index rising to 103.5 points from 101.5 points in the previous month. Similarly, the trade sector improved to 105.5 points from 102.7 points, reflecting increased demand and better business turnover.

The NESG attributed the improvement partly to stronger demand conditions, noting that “Nigeria’s business environment improved, albeit recording fragile expansion in May 2026. Robust demand conditions largely reflect festivity-induced consumer spending.”

The report further stated that improved demand helped drive higher production levels, better operating profits, improved financial results, and increased supply orders across multiple sectors.

Key indicators such as general business conditions, production output, demand levels, operating profits, financial performance, access to credit, cash flow, and employment all remained within expansion territory, suggesting broad-based but cautious growth.

Despite these gains, businesses continue to face significant headwinds. The report highlighted rising input costs and high operating expenses as major constraints affecting profitability and expansion plans.

Other challenges include limited access to finance, unreliable electricity supply, high office rental costs, and insecurity, all of which continue to weigh on business performance and investor sentiment.

Investment and export-related indicators remained in contraction territory, while trade stockpiling also weakened during the period, reflecting lingering uncertainty in the operating environment.

The NESG stressed that sustained policy reforms aimed at improving access to credit, stabilizing power supply, and addressing insecurity would be essential to strengthening business confidence and supporting long-term economic growth in Nigeria.