By Babajide Komolafe

The Nigerian Economic Summit Group, NESG, has reported an improvement in business confidence in May 2026, driven largely by a strong recovery in the manufacturing sector and robust consumer demand despite persistent cost pressures.

According to the latest NESG Business Confidence Monitor, BCM, the Current Business Performance Index rose to 104.6 points in May from 102.1 points recorded in April, indicating an expansion in business activities across the economy.

The report, however, noted that the latest reading remained below the 109.8 points recorded in May 2025, suggesting that while businesses are expanding, growth remains fragile amid lingering economic challenges.

A breakdown of the report showed that manufacturing emerged as the strongest performer during the month, with its business condition index rising sharply to 114.1 points from 98.7 points in April, signaling a return to expansion territory.

Similarly, performance improved in the services and trade sectors, with their respective indices rising to 103.5 points and 105.5 points from 101.5 points and 102.7 points in the preceding month.

The report stated: “Nigeria’s business environment improved, albeit recording fragile expansion in May 2026. Robust demand conditions largely reflect festivity-induced consumer spending.”

The NESG noted that strong demand conditions supported higher production levels, improved operating profits, stronger financial results and increased supply orders during the month.

Data from the survey showed that key business indicators, including general business situation, production, demand conditions, operating profit, financial results, access to credit, cash flow and employment, remained firmly in expansion territory.

Despite the improvement, businesses continued to grapple with elevated operating costs. The report highlighted rising input prices and a high cost of doing business as major concerns affecting firms across sectors.

It further identified limited access to finance, inadequate electricity supply, high office rental costs and worsening insecurity as key constraints undermining business operations.

The report also showed that investment and export indicators remained in contraction territory, while trade stockpiling slipped into contraction during the review period.

According to the NESG, sustained reforms aimed at improving access to finance, enhancing power supply and addressing security concerns would be critical to strengthening business confidence and supporting long-term economic growth.