This positive sentiment, shared by firms across various sectors, reflects a strong confidence in economic activity, except in the construction sector, which has reported caution in employment plans.
The survey highlights that sectors such as agriculture, mining, electricity, and water supply are at the forefront of this optimism, driving expectations for both employment growth and capacity utilization.
What the report is saying
On Employment: Among the surveyed sectors, agriculture holds the highest prospects for workforce expansion in November 2024.
“In line with the favourable expectations, businesses hope to employ more workers in the month of November 2024 except for the Construction Sector. An analysis of the Sectors showed that Agriculture had the highest prospect for employment and expansion in November 2024” CBN Survey.
- This optimism in the agricultural sector aligns with the anticipated increased activity due to seasonal demand and ongoing governmental initiatives aimed at boosting agricultural productivity.
- By prioritizing agriculture, companies are likely responding to both domestic food security concerns and opportunities for export, given Nigeria’s substantial natural resource base and labour supply.
- This planned hiring surge in agriculture is part of a broader trend across most sectors, which collectively signal strong intentions to bolster their workforce.
- This anticipated employment growth suggests that many Nigerian businesses are gearing up for an uptick in productivity and demand, likely fueled by seasonal economic drivers and policy support for core industries.
On Capacity Utilization: Businesses surveyed indicated an upward trend in October 2024.
- Sectors like mining and quarrying, along with electricity, gas, and water supply, were identified as having the most positive capacity utilization rates.
- These survey findings buttress the resilience and expansion within Nigeria’s resource-driven sectors, which have experienced fluctuating performance due to global economic uncertainties and local infrastructure challenges.
- Increased output in mining and utilities supports higher levels of domestic industrial activity and also reduces operational costs for businesses dependent on reliable energy and resource supply chains.
The industrial sector still reeling
The BES report emphasizes that most Nigerian businesses maintain an optimistic outlook on their operations, despite the persisting challenges in the industrial sector.
- While all other sectors, including services, agriculture, and utilities, expressed confidence in their operational growth and capacity for expansion, the industrial sector remains an exception due to a mix of lingering economic challenges.
- The industrial sector’s hesitancy may reflect underlying concerns related to inflationary pressures, currency fluctuations, and supply chain disruptions.
- These challenges have especially impacted manufacturing and heavy industries that rely on imported raw materials and machinery, making them vulnerable to external economic conditions.
Expectations for sustained business activity into 2025
Looking beyond November, the survey reflects a favourable outlook for business activity in January and April 2025.
- Respondents across all sectors, despite their varied operational challenges, reported a positive expectation for business activity in these months.
- This continued optimism reflects both short- and medium-term confidence in Nigeria’s economic trajectory, with businesses preparing to capitalize on future demand and productivity opportunities.
- The positive expectations for January and April 2025 also align with the government’s anticipated economic recovery, supported by its policy reforms.
- Businesses are likely factoring in upcoming government initiatives aimed at improving the business environment, stimulating demand, and promoting exports, all of which contribute to a sustained positive outlook.
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