Nigeria's business environment recorded a modest improvement in May 2026, driven largely by stronger consumer demand and a rebound in manufacturing activities, according to the latest Business Confidence Monitor (BCM) released by the Nigerian Economic Summit Group (NESG).
Current Business Performance Index Rises
The report showed that the Current Business Performance Index rose to 104.6 points in May from 102.1 points in April, indicating continued expansion in business activities. However, the reading remained below the 109.8 points recorded in May 2025, suggesting weaker momentum compared to the same period last year.
The report said businesses benefited from increased demand during the month, although high operating costs, inadequate infrastructure, insecurity and limited access to finance continued to constrain growth.
Manufacturing Leads Sectoral Performance
Manufacturing recorded the strongest performance, with its index rising sharply to 114.1 points from 98.7 points in April, returning the sector to expansion territory. The improvement was driven by stronger activities in Food, Beverage and Tobacco, Textile, Apparel and Footwear, and Basic Metals, Iron and Steel. Despite the rebound, manufacturers continued to face challenges including erratic electricity supply, rising input costs, inadequate infrastructure and restricted access to credit.
In contrast, the agriculture sector slipped into contraction, with its index declining to 97.5 points from 103.2 points in April. The report attributed the downturn to insecurity, poor infrastructure, energy shortages and financing constraints, which continued to hamper farming and agribusiness activities.
The Non-Manufacturing Industries sector also contracted, as its index fell to 99.4 points from 101.6 points in April. Weak performance in natural gas and oil and gas services offset gains recorded in construction and crude petroleum activities.
Services and Trade Sectors Expand
Meanwhile, the services sector maintained expansion, with its index improving to 103.5 points from 101.5 points in April. Financial institutions, professional services and real estate recorded stronger performance, while telecommunications and broadcasting posted slower growth. The Trade sector also strengthened, with its index rising to 105.5 points from 102.7 points, supported by increased wholesale and retail activities amid stronger consumer spending.
Future Outlook Remains Optimistic
Looking ahead, businesses remained optimistic about near-term economic conditions. The Future Business Expectations Index stood at 127 points in May, although lower than the 128.6 points recorded in April. Manufacturing posted the strongest confidence level among all sectors, followed by Trade, Agriculture and Non-Manufacturing Industries.
According to the report, expectations of improved agricultural output during the harvest season and increased economic activities linked to the build-up to election campaigns are expected to support business performance in the coming months. The report, however, identified inadequate power supply, insecurity, limited access to finance, high rental costs and infrastructure deficits as major constraints facing businesses across the economy.
