Business expansion persists despite elevated input prices, supply constraints in June—NESG

Nigerian Economic Summit Group has said in its Business confidence report for the Month of June that Nigeria’s business environment remained in the expansion territory.

It said “The NESG Business Confidence Monitor (BCM) Current Business Performance Index was unchanged at 104.6 points relative to May 2026, but this marked a significant decline from 113.6 points in June 2025.

“Further breakdown indicates uneven performance across sectors in June 2026. Manufacturing and Trade remained in expansion, but registered a weaker performance relative to the previous month.

“Agriculture and Non-manufacturing also moved into expansion in June 2026, while Services contracted during the month.

“Key BCM sub-indices, including general business situation, production, demand conditions, operating profit, financial results, supply order, access to credit, cash flow, and employment, remained in the expansion territory, with more than half recording a stronger performance compared to May 2026.

“By contrast, trade stockpiling moved into contraction, while investment and exports remained depressed. Although the cost of doing business moderated, input prices remained elevated.

“Firms continued to face major constraints, especially limited access to finance, power outages, high rental costs, and insecurity during the month.

“Business activity in Agriculture moved into the expansion region, with the NESG Business Confidence Monitor (BCM) Index for the sector rising to 103.9 points in June 2026 from 97.5 in the previous month. The index reading, however, represents a decline from 108.9 points recorded in June 2025.

“Performance was mixed across the subsectors in June 2026. Business activity moved into expansion in Crop Production, Agro-Allied, and Fishing. Notably, early harvests and persistent rainfall supported increased crop output during the month. However, business activity contracted in the Livestock subsector, while Forestry remained in contraction.

“Despite business expansion, industry players continue to face key constraints, including limited access to credit, persistent insecurity, erratic power supply, and infrastructural bottlenecks. These challenges discouraged new investments and hampered the sector’s employment generation during the month.

“Business activity in the Manufacturing sector remained in the expansion region in June 2026, although the NESG Business Confidence Monitor (BCM) Index fell to 106.4 points from 114.1 points in May 2026 and 123.6 points in June 2025.

“Performance was mixed across the subsectors in June 2026. Of the six subsectors that recorded expansion, only Textile, Apparel & Footwear performed better than in May 2026. However, Food, Beverage & Tobacco, and Pulp, Paper & Paper Products posted weaker expansion than in the previous month.

“The other three subsectors (Chemical & Pharmaceutical Products, Wood & Wood Products, and Non-Metallic Products) moved into the expansion territory during the month.

“Moreover, Cement and Plastic & Rubber Products remained in contraction, while Basic Metal, Iron & Steel also fell into contraction. The remaining two subsectors stayed at the neutral 100-point level.

“Despite the overall expansion, manufacturers grappled with credit constraints, energy shortages, inadequate raw materials, infrastructure deficits, and high rental costs, which squeezed profit margins and constrained new investments during the month.

“Business activity in the Non-manufacturing sector moved into the expansion region in June 2026, with the NESG BCM Index rising to 106.8 points from 99.4 in May 2026. However, the reading was lower than the 120.7 points recorded in June 2025.

“Performance was broadly positive across the subsectors in June 2026. Construction and Crude Petroleum posted stronger expansion than the previous month, while Natural Gas and Other Non-Manufacturing activities entered the expansion territory. Oil & Gas Services, however, remained in contraction during the month.

“Despite the improved performance, key constraints persisted. Elevated rental costs, regular power cuts, and infrastructure challenges continued to drive up operating costs for many industry players during the month”.