Nigeria’s private sector recorded its strongest business performance in five months in July, extending a seven-month streak of expansion, according to the latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG).
The NESG’s Current Business Performance Index rose to 108.6 points in July from 104.6 points in June, its highest reading since February. Under the BCM methodology, any reading above 100 indicates expansion in business activity.
The improvement reflected broad-based growth across major sectors of the economy. Non-manufacturing recorded the strongest performance, with its index rising to 116.6 points from 106.8 points in June. Agriculture improved to 110.8 points, supported by favourable rainfall and early harvests, while manufacturing advanced to 110.5 points, driven by stronger activity in cement, textiles, apparel, chemicals and pharmaceuticals. The services sector returned to expansion at 108.3 points after recording 98.5 points in June, while trade edged higher to 102.8 points.
According to the NESG, the improvement was supported by stronger performance in oil and gas services as well as crude petroleum and natural gas activities. Key business indicators, including production, demand, operating profit, cash flow, employment and access to credit, remained in expansion territory during the month.
Despite the stronger business activity, firms continued to face significant operational challenges. The report identified limited access to finance, unreliable electricity supply, high commercial rents, insecurity and inadequate infrastructure as the leading constraints on business growth. Rising input costs and broader operating expenses continued to pressure profit margins, while investment remained in contraction despite the improvement in overall business conditions.
Business sentiment for the next one to three months remained positive but largely unchanged. The Future Business Expectation Index stood at 128.3 points, compared with 128.4 points in June, indicating sustained optimism among businesses despite persistent cost pressures. Trade and manufacturing firms expressed the strongest confidence, while agriculture and services were relatively more cautious.
The outlook comes as businesses continue to navigate elevated financing costs after the Central Bank of Nigeria retained the Monetary Policy Rate at 26.5% at its July meeting, keeping borrowing costs high for firms seeking to expand. Economists have noted that sustained improvements in business activity will depend on easing structural constraints, including energy costs, infrastructure gaps and access to affordable financing.
