Report: Improvement in Manufacturing, Trade, Service Drove Business Expansion in May
Dike Onwuamaeze
The Nigeria Economic Summit Group’s (NESG) Business Confidence Monitor (BCM) report stated that improved performances in manufacturing, services and trade drove business expansion in May 2026.
The report said that Nigeria’s business environment remained in the expansion territory in May 2026 as its Current Business Performance Index rose to 104.6 points in the month under review from 102.1 it recorded in April 2026.
The report said that despite this expansion, business activity was constrained by limited access to finance, incessant power outages, elevated rental costs, and persistent insecurity during the month.
The report said, “In May 2026, Nigeria’s business environment improved, albeit recording fragile expansion. The NESG Business Confidence Monitor (BCM) Current Business Performance Index rose to 104.6 points in the month from 102.1 points in April 2026. However, the index reading represents a downturn from 109.8 points recorded in May 2025.”
Further breakdown of the report indicated broadly positive performance across sectors in May 2026.
It said that manufacturing moved into the expansion territory to 114.1 points from 98.7 in April 2026.
Similarly, the index reading rose for services to103.5 points from 101.5 and trade grew to105.5 points from 102.7.
Also, 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, even though only a few performed relatively better than in April 2026.
However, the cost of doing business and input prices remained elevated. During the month, business activity faced key constraints, including limited access to finance, inadequate power supply, high office rental costs, and elevated insecurity.
According to the report, “business activity in the manufacturing sector moved into the expansion territory in May 2026, with the NESG BCM Index rising significantly to 114.1 points from 98.7 in April 2026.”
It attributed the strong business expansion in the manufacturing sector to improved performance in key subsectors, including food, beverage and tobacco, textile, apparel and footwear, pulp, paper and paper products, and basic metal, iron and steel that posted almost stronger performance than in April 2026.
Conversely, cement, chemical and pharmaceutical products, plastic and rubber products, wood and wood products, and non-metallic products largely contracted during the month.
The report said that many industry players in the manufacturing sector faced key constraints, including limited access to credit, an irregular power supply, a shortage of raw materials, and inadequate infrastructure, resulting in elevated input prices, a high cost of doing business, and limited new investment commitments during the month.
The NESG BCM Index for the agriculture sector fell into contraction at 97.5 points in May 2026 from 103.2 points in the previous month. It also represents a steeper contraction compared with its level in May 2025 which was 98.2 points.
The report stated that business activity contracted in crop production and forestry.
However, livestock maintained a stronger expansion level relative to April 2026, while fishing held steady at the neutral 100-point mark.
It attributed the subdued business performance in the sector to protracted challenges, including widespread insecurity, energy shortages, and infrastructural challenges, which elevated the overall cost of doing business and constrained new investments during the month.
The report stated that business activity in the non-manufacturing sector fell into the contraction region in May 2026, with the NESG BCM Index at 99.4 points, down from 101.6 points in April 2026.
It said business activity in all subsectors, except construction and crude petroleum, fell into contraction in May 2026.
The NESG’s Non-manufacturing Business Performance Index showed that industry players grappled with challenges, including prohibitively high rental costs, regular power outages, infrastructural bottlenecks, and credit squeeze, which largely constrained business activity and new investments during the month.
However, business activity in the services sector remained in the expansion territory in May 2026, with the NESG BCM Index at 103.5 points, up from 101.5 points in April 2026.
Performance was mixed across subsectors in services during the month.
The BCM said that while real estate, financial Institution and professional, scientific and technical services remained in expansion, recording stronger performances relative to April 2026, the real estate moved into the expansion territory, business activity weakened in telecoms and information services.
It said that the service sector was confronted with key constraints, including energy deficit, limited financing, high rental costs, and regulatory uncertainty, which hindered new investments among the industry players during the month under review.
May 2026, business activity in the trade sector remained in the expansion region, with the NESG BCM Index at 105.5 points, rising from 102.7 points in April 2026, albeit dropping from 114.1 points in May 2025.