The manufacturing and non-manufacturing Purchasing Managers’ Index (PMI) for the month of October showed a slowing contraction relative to previous months, making it the 7th consecutive month both indices have been below the 50-index point benchmark.1 Manufacturing PMI increased from 46.9 index points to 49.4 index points while non-manufacturing increased from 41.9 index points to 46.8 index points, but still below the 50-index point benchmark. However, 6 out of 14 subsectors in the manufacturing sector recorded an expansion relative to the previous month. In the non-manufacturing sector, only 3 out of the 7 sub sectors recorded growth relative to the previous month. Production is expected to improve significantly as the economy rebounds and the festive season approaches, thus both manufacturing and non-manufacturing PMI are expected to advance towards the 50-index point benchmark. However, the increase in PMI, as a result of increased demand, is likely to be associated with rising inflation. As such, the Central Bank of Nigeria (CBN) should increase efforts towards addressing the rapid increase in the price of commodities.
December 14, 2020
Nigeria Economic Update (Issue 44)
Related
Nigeria Economic Update (Issue 10)
Nigerias external reserve rose to its 19-month high in the week under review (March 3, 2017 to March 10, 2017). Precisely, the reserve improved by a daily average-percentage-increase of 0.21 percent, from $29.79 billion on March 3, 2017 to $30.04 billion on March 10, 2017 the highest level since August 2015. The rising reserve at the backdrop of steady revenue from improved domestic crude oil production/prices and forex inflows from rising exports, has reduced pressure on the Naira the naira has witnessed marginal but steady appreciation. While the recent improvement in oil revenue is a welcome development, concerted efforts need be made to develop the Non-oil sector so as to mitigate future oil revenue shocks.