Report: Improvement in Manufacturing, Trade, Service Drove Business Expansion in May

Nigeria's business environment demonstrated expansion in May 2026, primarily fueled by robust performances in the manufacturing, trade, and services sectors, according to the Nigeria Economic Summit Group's (NESG) Business Confidence Monitor (BCM) report. The Current Business Performance Index climbed to 104.6 points for the month, up from 102.1 in April 2026, indicating continued growth.

However, the report noted that this expansion was fragile and marked a downturn compared to May 2025, when the index stood at 109.8 points. Despite the overall positive trend, businesses grappled with significant constraints. These included limited access to finance, persistent power outages, elevated rental costs, and ongoing insecurity, which collectively hampered business activity.

The manufacturing sector, in particular, showed a strong rebound, moving into expansion territory with its index rising to 114.1 points from 98.7 in April. This surge was attributed to improved performance in subsectors like food, beverage, tobacco, textiles, and basic metals. The services sector also saw an increase, with its index rising to 103.5 points from 101.5, and trade grew to 105.5 points from 102.7.

Key sub-indices tracking general business situation, production, demand, operating profit, financial results, and employment also remained in expansion territory. Nevertheless, the cost of doing business and input prices continued to be elevated. The agriculture sector, however, experienced a contraction, with its BCM Index falling to 97.5 points in May 2026 from 103.2 in the previous month.

Industry players in manufacturing cited challenges such as limited credit access, irregular power supply, raw material shortages, and inadequate infrastructure. These factors contributed to high input prices, increased business costs, and limited new investment commitments during the month.