CBN Survey: Business Confidence Rises in May 2026, but Hiring Stays Weak

A new Central Bank of Nigeria survey shows businesses across all sectors are more optimistic about the economy. Firms expect stronger activity and naira appreciation, but the employment outlook remains negative.

Confidence improves across sectors

The Business Expectations Survey, released on the CBN website, covers 1,900 firms with a 99.5% response rate. It is jointly compiled with the National Bureau of Statistics. All major sectors reported positive expectations for current and future conditions.

The industrial sector recorded a confidence index of 12.5 points. Agriculture scored 9.4 points. Services came in at 4.6 points. These figures show steady improvement compared to April 2026.

Firms are optimistic about business activity for June, August and November 2026. Confidence strengthens further over longer-term horizons.

Employment remains a weak spot

Despite the upbeat mood, employment expectations stayed negative across all sectors. Companies plan to slow or reduce hiring in the near term, even as business conditions improve. This reflects lingering caution in recruitment decisions.

Mining and quarrying leads expansion

Among all sectors, Mining and Quarrying recorded the strongest expansion outlook at 69.2 points. Construction and agriculture followed. The sector also posted the highest capacity utilisation levels during the review period.

Overall average capacity utilisation stood at 55.9%. That is slightly below 56.0% in the previous month, suggesting marginal stability in production activity.

Naira expected to strengthen

Respondents expect the naira to appreciate against the US dollar over the short and medium term. This reflects improved market sentiment and expectations of policy stability.

However, borrowing costs are expected to remain elevated across all time horizons. This underscores persistent tight financial conditions for businesses.

Key constraints remain

Despite improved optimism, firms identified several severe operational challenges. Insecurity scored 72.9 points. Multiple taxation hit 70.3 points. High interest rates came in at 67.7 points. Unfavourable political climate scored 64.2 points. High bank charges stood at 64.1 points.

Other constraints included financial pressure, weak infrastructure and access to credit. These structural bottlenecks continue to affect private sector growth.

Regional differences emerge

The survey revealed regional disparities in sentiment. The North-East recorded the strongest optimism. Parts of the South-East and South-South showed weaker or negative short-term expectations.

Over a six-month horizon, however, optimism was broadly positive across all geopolitical zones. This indicates expectations of gradual economic stabilisation.

What this means

While firms remain broadly optimistic about Nigeria's macroeconomic trajectory, the report signals a dual reality. Improving sentiment coexists with persistent structural challenges, especially in employment and operating costs.

Sustained policy reforms addressing security, taxation and financing conditions will be key to converting business confidence into real economic expansion.