Nigeria Economy | |
Nigeria Economy | |
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Monday, January 8, 2018 /10:55 AM /FSDH
FSDH Research expects business profit and consumer income to grow higher
in 2018 than in the last three years. Our analysis of the recent data from the
Central Bank of Nigeria (CBN) on the business and consumer expectations
confirms this position. The Surveys that the CBN conducted in December 2017 show that the
expectations of firms and consumers about the next 12 months improved from
previous months.
The improvement in the business expectations should drive business
expansion and increase the employment of labour. This in turn will increase the
consumers’ purchasing power. On the other hand, the increase in consumer
expectations will increase spending which will have positive impact on
businesses. The interrelationship between the two economic agents (business and
consumer) will drive business profit and consumer income.
The latest Purchasing Managers’ Index (PMI) report that the CBN
published for the month of December 2017 shows improved business activities in
both the manufacturing and nonmanufacturing sectors. At 59.3 and 62.1 points,
the Composite Manufacturing PMI and Composite Non-Manufacturing PMI
respectively attained the highest levels since January 2015.
The impact of the expected growth in the business profit and consumer
income is positive to the financial market. We expect it to drive equity market
investments and position corporates to access long-term capital needed for
expansion. Banks should also be more favourable to extend credit to both
businesses and individuals, leading to a growth in the National Disposable
Income.
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