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Businesses raise employment outlook after a boring June

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THUR, JUN 25 2020-theG&BJournal-Businesses raised their hiring outlook for the remaining months of 2020, sharing optimism about the uptick in volume of business activity in the next two to six months as all indexes were positive. Their views are reflected in the latest Central Bank of Nigeria’s (CBN) June 2020 Business Expectations Survey Report.

Firms in the agric and services sector indicated the highest prospect for employment in the month of July with an index of (5.7 points) followed by manufacturing sector (4.9 points), wholesale and retail trade (3.1points).

Respondent firms’ opinions on the volume of business activities (47.6 points) indicated a favourable business outlook for July 2020. The employment index was positive at 5.0 points.

The agric and services sector indicated the highest disposition to businesses expansion plans in July with an index of 41.4 points, according to the survey findings.

Construction sector had an index of 40.0 points, manufacturing sector had 39.5 points and wholesale/retail trade sector had an index of 26.8 points, suggesting job openings following the shrink witnessed since the COVID-19 pandemic outbreak in early 2020.

At -24.3 index points, overall confidence index (CI) indicated respondents’ pessimism on the overall macro economy in the month of June, but shared optimism in their outlook for July with a confidence index of 31.8.

Furthermore, they expressed optimism in the overall business outlook in August and December 2020 as shown in a greater confidence of the economy, at 47.4 and 67.8 index points, respectively.

The pessimism on the macro economy in the current month was driven by the opinion of respondents from agric/services (-13.9 points), manufacturing (-7.5 points), construction (-1.8 point) and wholesale/retail trade sectors (-1.1 point).

The major drivers of optimism for next month were agric/services (18.8 points), manufacturing (8.8 points), wholesale/Retail (2.8 points) and construction (1.4 point).

Further analysis showed that all classes of businesses; neither import nor export-oriented (16.0 points), both import-export-oriented (-4.7 points), import-oriented (3.4 point), and export-oriented (-0.3 point), drove the negative business outlook in June 2020.

All sectors expressed pessimism on own operations in the review month. Respondents from the wholesale/retail trade sector had -0.6 points followed by construction with -1.0 points, manufacturing sector had -6.0 points, while the agric/services sector had -14.2 points.

Outlook on the volume of total order, financial conditions (working capital), access to credit and average capacity utilization all remained negative, at -22.9,-21.7,-19.0 and -12.5 index points, respectively. Respondents were however optimistic on the volume of business activity in June 2020 as the index stood at 47.4 points.

The June 2020 Business Expectations Survey was conducted June 8-12th, 2020. The respondent firms were made up of small, medium and large corporations covering both import-oriented and export-oriented businesses, according to the CBN.

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