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Nigeria’s PMI remains positive for the 24th consecutive month

However, the business activity index grew at a slower rate 57.8 points for the twenty-fourth consecutive, indicating contraction in non-manufacturing sector.

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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).

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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.

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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.

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.

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

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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.

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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.

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Around the World

Buhari nominates Okonjo-Iweala as DG World Trade Organization

President Muhammadu Buhari nominated the former Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).

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Nigeria’s former finance minister, Okonjo-Iweala, gets IMF appointment

President Muhammadu Buhari has nominated the former Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).

This was seen in a tweet posted by the Presidential aide on Digital and New Media, Tolu Ogunlesi, in the early hours of Friday, June 5, 2020.

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In the statement, Ogunlesi said that the current Director-General of the intergovernmental organization, Roberto Azevedo, is stepping down from his position on August 2020, a year ahead of the end of his tenure.

Azevedo, who has been the head of the WTO since 2013, is stepping down at this critical period of global economic crisis and the trade war between the United States of America and China.

This means that the election that was earlier scheduled for 2021 when his tenure was supposed to expire might be coming up much earlier for a new four-year term.

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Tolu Ogunlesi in his statement said, ”President Muhammadu Buhari has nominated Okonji-Iweala as Nigeria’s candidate for the position of the Director-General of World Trade Organization. DG Azevedo is stepping down in August 2020, a year earlier, so the election of the new DG, originally scheduled for 2021, may take place much earlier”.

Details later…

 

 

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Just-in: AfDB board agrees to an independent probe of Akinwumi Adesina

The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.

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Dr. Akinwnmi Adesina, Lutoyilex Construct Ltd, Fraud, AfDB

The Bureau of the Board of Governors of the African Development Bank (AfDB), has agreed to authorize an independent review of the report of the ethics committee of the bank’s board of directors on the allegations levied against the President of the Bank, Akinwumi Adesina.

This was contained in a communique which was released and signed by the Chairperson of the Bureau of Board of Governors, Ms Niale Kaba, after the meeting of the bureau board of governors on June 4, 2020, with respect to the complaints against the President of the bank.

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In taking the decision, the Bureau agreed that the ethics committee performed its role on this matter in accordance with the applicable rule under resolution B/BG/2008/11 of the board of governors and that the Chairperson of the Bureau of Board of Governors performed her role in accepting the findings of the ethics committee in accordance with the said resolution.

The bank’s board of governors in its statement said, ‘’Based on the views of some Governors on the matter and the need to carry every Governor along in resolving it, the Bureau agrees to authorize an independent review of the report of the ethics committee of the board of governors relative to the allegations considered by the ethics committee and the submissions made by the President of the Bank Group thereto in the interest of due process.

‘’The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.

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‘’The Bureau agrees that, within a three to six months period and following the independent review of the ethics committee report, an independent comprehensive review of the implementation of the bank’s group whistleblowing and complaints handling policy should be conducted with a view to ensuring that the policy is properly implemented, and revising it where necessary, to avoid situations of this nature in the future.’’

Following the allegations of unethical conducts, questionable appointments and contract awards by a group of whistleblowers and the subsequent clearance of all charges by the bank’s ethics committee, the United States Government, who is the largest shareholder outside Africa, asked for an independent probe of those allegations.

The US treasury secretary questioned the integrity of the committee’s process as well as the internal processes of the bank.

Adesina, a few days ago, met with President Muhammadu Buhari, where he assured of the country’s support towards his travails and his second term bid for the Presidency of the multilateral institution.

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Business News

FG removes cap on petrol price, allows marketers to fix price

The price cap per liter in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations.

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Subsidy and PIB

The Federal Government has removed the cap on Premium Motor Spirit (PMS) price, popularly known as petrol.

This was disclosed by the Petroleum Products Pricing Regulatory Agency (PPPRA) via a memo, which was dated March 30, 2020, but realised on May 4, 2020, titled ‘Market Based  Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020.

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What it means: With the new development, marketers now have the freedom to fix the price of the commodity and sell above the price given by the agency.

Executive Secretary, PPPRA, Abdulkadir Saidu, explained that the agency would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers on the monthly guiding price for the commodity.

“The price cap per litre in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations. From the commencement of these Regulations, a market-based pricing regime for PMS shall take effect,” he said.

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Meanwhile, Nairametrics had reported that the agency announced a new retail price band for oil marketers.

In a circular dated May 31st, as seen by Nairametrics, the downstream regulator said oil marketers are now expected to sell petrol within the price range of N121.50 and N123.50. Part of the circular said:

“Please recall the recently approved pricing regime which became effective March 19, 2020, and the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations.”

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