By Mathew Chima

Textile manufacturing

The Nigerian Economic Summit Group (NESG) says Nigeria’s business activity remained in expansion territory for the sixth consecutive month in June as manufacturing and trade sustained growth despite persistent cost pressures, supply bottlenecks and insecurity.

NESG’s June 2026 Business Confidence Monitor (BCM) showed that the current business performance index (CBPI) stood at 104.6 points, unchanged from May but below the 113.6 points recorded in June 2025, indicating that businesses continued to expand, but at a slower pace than a year earlier.

The BCM is a monthly survey of business managers that measures current business conditions and short-term expectations.

Under the index, a reading above 100 points indicates expansion, while a score below 100 signals contraction.

The report disclosed that manufacturing and trade sustained the overall expansion during the month, while agriculture and non-manufacturing returned to growth after contracting in May.

However, the group said businesses continued to grapple with elevated input prices, supply bottlenecks, limited access to finance, irregular power supply, high rental costs and widespread insecurity.

“Business growth was supported by continued expansion in Manufacturing and Trade, as well as the recovery in Non-Manufacturing and Agriculture,” the report reads.

“However, business activity was constrained by elevated input prices, supply bottlenecks, limited access to finance, irregular power supply, high rental costs, and widespread insecurity during the month.” 

‘A HALF-YEAR OF CONTRACTION AND EXPANSIONS’

The report showed that the recovery remained uneven across sectors.

Manufacturing remained in expansion, although its index slowed to 106.4 points in June from 114.1 points in May as manufacturers contended with credit constraints, energy shortages, inadequate raw materials, infrastructure deficits and rising rental costs.

Within the sector, cement, plastics and rubber products, and basic metals, iron and steel slipped into contraction, while textile, apparel and footwear recorded stronger performance than in the previous month.

Trade also remained in expansion territory, with its index easing to 102.0 points from 105.5 points in May, while wholesale trade maintained growth, retail trade contracted as businesses struggled with limited access to finance, irregular electricity supply and logistics challenges.

Agriculture rebounded into expansion, with its index rising to 103.9 points from 97.5 points, supported by early harvests, persistent rainfall, crop production, agro-allied activities and fishing — however, livestock and forestry remained in contraction.

The non-manufacturing sector also recovered, climbing to 106.8 points from 99.4 points in May, driven by stronger activity in construction as well as crude petroleum and natural gas.

Oil and gas services, however, remained in contraction.

Services was the only broad sector to contract during the month, with its index falling to 98.5 points from 103.5 points in May.

NESG attributed the decline to persistent energy shortages, limited access to finance, high rental costs and regulatory uncertainty.

Broadcasting slipped into contraction, while financial institutions, real estate and telecommunications recorded weaker growth than in May.

Beyond the sectoral performance, the report said production, demand conditions, operating profit, financial results, supply orders, access to credit, cash flow and employment all remained in expansion territory, with more than half of the indicators improving from the previous month.

However, trade stockpiling moved into contraction, while investment and exports remained subdued, although the cost of doing business moderated during the month, input prices remained elevated, reflecting the persistent cost pressures facing businesses.

‘BUSINESSES REMAIN OPTIMISTIC’

Despite the difficult operating environment, businesses were more optimistic about the next one to three months.

The Future Business Expectations Index rose to 128.4 points in June from 127.0 points in May.

Trade posted the strongest outlook at 174.6 points, followed by manufacturing at 166.0 points, non-manufacturing at 142.8 points, agriculture at 127.4 points, and services at 112.7 points.

The NESG attributed the improved sentiment partly to expectations of lower energy costs following the easing of geopolitical tensions in the Middle East, which contributed to a decline in global oil prices during the month.

Source: TheCable