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Consumers contradict firms on economic conditions in Q2 — CBN Survey

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Economy is worsening — Consumers
It is improving — firms

By Elizabeth Adegbesan

A  Central Bank of Nigeria (CBN) survey has shown that  confidence of consumers  in the macro economy worsened in the second quarter of 2018, (Q2’18) to -6.3 percent, contradicting the 34.5 percent confidence of private sector operators during the quarter.

The survey titled, ‘Consumer Expectation Survey’ (CES) for Q2’18 released yesterday stated that “Consumers’ overall confidence outlook worsened in Q2’ 2018, as more consumers were less optimistic in their outlook.

The Central Bank of Nigeria head office in Abuja.

“The index at -6.3points was 10.7points lower than the index in the corresponding period of 2017. Some respondents attributed this moderation in outlook to worsening economic condition.”

But the Business Expectation Survey (BES) released earlier on Monday by the apex bank showed improvement in private sector operators’ confidence in the macro economic environment. Vanguard analysis of the BES showed that the Business Confidence Index, BCI, on the macro economy improved to 34.7 percent in June from 24.5 percent in March.

The BES also showed greater business outlook of 64 percent for July, far above the Consumers Confidence Index of 16.2 percent for the second quarter, indicated in the CES report.

The CES also revealed that consumers expect unemployment to rise in the next 12 months but expect the naira to appreciate.

The CES stated:  “The unemployment index for the next 12 months remained positive at 23.3 points in Q2’ 2018, indicating that majority of the consumers expect unemployment to rise in the next 12 months.

However, the consumer outlook for the next quarter and next 12 months were positive at 16.2 and 21.2points, respectively. This outlook, according to the survey, could be attributed to the expected increase in net household income, the anticipated improvement in Nigeria’s economic conditions, and expectations to save a bit and/or have plenty over savings in the next 12 months.

The report further noted:  “Most respondents expect the prices of goods and services to rise in the next 12 months with an index point of 13.2 points. The major drivers are: education, medical care, transportation, electricity, house rent, and food & other household needs.

“The overall buying conditions index for consumers in the current quarter for big-ticket items stood at 32.0points. This indicates that majority of consumers believed that the current quarter was not the ideal time to purchase big-ticket items like consumer durables, motor vehicles, house and  lot.”

“Overall buying intention index in the next twelve months stood at 42.6 index points, indicating that majority of consumers intend to buy these items in the next 12 months.”

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