Development Policies

The latest manufacturing Purchasing Managers’ Index (PMI) covering the month of March 2019, indicates that Nigeria’s manufacturing sector expanded for the 24th consecutive month.

This is reflected in the PMI Survey Report released by Central Bank of Nigeria (CBN).

Just as in previous months, the manufacturing PMI for March 2019 stood at 57.4 index point, well above the 50-point threshold that separates expansion from contraction in business conditions. This indicates robust growth in the private sector.

Basic PMI Highlights 

  • The Manufacturing sector shows expansion as PMI in the month of March stood at 57.4 index points
  • The Non-manufacturing Sector also expanded with the composite PMI at 58.5 points in March 2019
  • The production level index for the manufacturing sector grew faster and witnessed sustained growth for the 25th consecutive month in March 2019.
  • Business activity for the non-manufacturing sector contracted with the index growing slowly for the 24th consecutive month

Manufacturing PMI grew for the 24th consecutive month

The Manufacturing PMI in the month of March stood at 57.4 index points, indicating expansion in the manufacturing sector for the 24th consecutive month. The index grew at a faster rate when compared to the index in the previous month.

Growing sub-sectors

Out of the 14 sub-sectors surveyed in the review month, 11 sub-sectors witnessed growth in the following order: cement; food, beverage & tobacco products; fabricated metal products; furniture & related products and paper products.

Also, chemical & pharmaceutical products; plastics & rubber products; electrical equipment; printing & related support activities; transportation equipment and nonmetallic mineral products all recorded growth in the review period.

Declining Sub-sectors

The Textile, apparel, leather & footwear; Petroleum & coal products and primary metal sub-sectors recorded decline in the review period.

Some breakdown of Manufacturing PMI

Production Level index for the manufacturing sector grew at 58.3 points for the twenty-fifth consecutive month in March 2019. The index indicated a faster growth in the current month when compared to its level in the month of February 2019.

New Orders for the review period recorded 56.7 points index, growth for the twenty-fourth consecutive month, indicating an increase in new orders in March 2019.

Coronation Research

The manufacturing supplier delivery time index stood at 58.4 points in March 2019, indicating faster supplier delivery time. The index has recorded growth for twenty-second consecutive months.

Employment Level index for March 2019 stood at 56.9 points, indicating growth in employment level for the twenty-third consecutive month.

Raw material Inventories index for the Manufacturing sector grew for the twenty-fourth consecutive month in March 2019. At 57.1 points, the index grew at a faster rate when compared to its level in February 2019.

Non-Manufacturing PMI up for the 23rd consecutive month

The composite PMI for the non-manufacturing sector stood at 58.5 points in March 2019, indicating expansion in the Non-manufacturing PMI for the 23rd consecutive month. The index grew at a faster rate when compared to that in February 2019.

Growing Sectors 

Out of the 17 surveyed subsectors, 14 sectors recorded growth in the following order: utilities; health care & social assistance; agriculture; information & communication; real estate, rental & leasing; repair, maintenance/washing of motor vehicles; construction. Also, educational services; wholesale trade; finance & insurance; electricity, gas, steam & air conditioning supply; professional, scientific, & technical services; accommodation & food services and water supply and sewage & waste management all recorded growth.

Transport Subsector remain unchanged while others decline

The Non-manufacturing PMI shows that transportation & warehousing remained unchanged while management of companies and arts, entertainment & recreation declined for the period under review.

Some Breakdown of Non-Manufacturing PMI

Business Activity index grew 57.8 points for the twenty-fourth consecutive month at a slower rate, indicating contraction in non-manufacturing business activity in March 2019.

New orders index grew at 58.9 points for the twenty-fourth consecutive month in March 2019.

The employment level Index for the non-manufacturing sector stood at 59.5 points, indicating growth in employment for the twenty-third consecutive month.

At 59.5 points, non-manufacturing inventory index grew for the twenty-third consecutive month, indicating growth in inventories in the review period.

Nigerian economy on the growth path

Just yesterday, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) announced a surprise cut in the monetary policy rate (PMR) from 14% to 13.5%. The surprise cut by the CBN has been greeted by investors as a welcome move.

However, analysts opined that the cut in MPR may not create much stimulus on the economy. According to the CBN, the economy is recovering and on the growth path.

In the communique read by the CBN Governor, Mr. Emefiele, it stated

“The Committee welcomed the continued positive sentiments in the Manufacturing and Non-Manufacturing Purchasing Managers’ Indices (PMIs) for the 24th and 23rdconsecutive months in March 2019.

“The increase in both measures of PMI was driven by increases in production, employment, raw material inventories and new orders.”

The MPC reiterated the improved outlook on Nigeria economy was attributable to the continued stability in the foreign exchange market, various interventions by the Bank in the real sector and the effective implementation of the Economic Recovery and Growth Plan (ERGP) by the Federal Government.

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