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Business confidence has dropped – LCCI

By on August 5, 2014

The Business Confidence Level Index dropped by 5.1 per cent in the third quarter of 2014, a survey by the Lagos Chamber of Commerce and Industry has revealed.

The survey showed that the third quarter 2014 aggregate BCI declined to 14.3 per cent from 19.4 per cent posted in the second quarter. This represents 5.1 per cent point drop.

The BCI is a leading economic indicator designed to measure the degree of optimism on the state of the economy that business leaders are expressing through their activities of investing and spending.

Decreasing business confidence is often a pointer to slowing economic activities because business owners are likely to decrease their investment.

The LCCI said on Sunday that the latest drop of the BCI scores suggested that business leaders remained largely pessimistic about expanding their investment over the next few months.

It said, “Nigeria’s BCI scores over the years continue to trail below the 50 per cent global business confidence threshold. Investors and business leaders remain wary about the state of the economy and the challenging business environment.

“The key factors that mostly depressed the confidence level of business leaders at this time are: security challenges across the country, political transition/electioneering activities and associated risks, cargo clearing issues and access to and from the nation’s foremost ports – Apapa and Tin Can; policy uncertainties and regulatory concerns; and worsening public power supply.”

The survey explained that all the sectors reported positive business confidence levels in the third quarter, adding that interestingly, the manufacturing sector posted a positive confidence level of four per cent for the second time over the last seven quarters.

“This sector has consistently remained at the bottom of the BCI league table by steadily recording negative confidence levels. Medium and small manufacturing enterprises are the most hit by the lingering challenges constraining productive activities in the country,” the survey said.

 

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