Daily Insight – PMI & economic growth in Q3-18: Faster or slower?


The National Bureau of Statistics (NBS) recently released Nigeria’s Purchasing Managers Index (PMI) for September – a monthly survey carried out by the CBN since 2014 to indicate changes in the level of business activities in the manufacturing and non-manufacturing sector.

According to the report, Manufacturing PMI (M-PMI) for the month of September stood at 56.2 index points, indicating an expansion in the manufacturing sector for the eighteenth consecutive month, albeit at a slower rate when compared to August’s 57.1 points. Notably, 10 of the 14 sub-sectors surveyed within the M-PMI reported growth while petroleum & coal products, cement, paper products, and primary metal subsectors which contributes c. 15.0% to the manufacturing GDP, recorded declines. Likewise, non-manufacturing PMI expanded to 56.5 points, the 17th consecutive, as all the underlying subsectors grew save for the construction sub-sector which contracted faster.

We note that the sustained expansion in PMI readings, suggests that GDP growth will remain positive in Q3-18, albeit at a slower rate, as average manufacturing
and non-manufacturing PMI data over the period slowed to 57.05pts from 57.12pts in Q2-18. Nevertheless, actual performance may surprise positively, if Agriculture and oil sector output rebound in Q3-18 in contrast to Q2-18. Overall, while we continue to reiterate the need to implement bold economic policy reforms to bolster real sector growth, we observe that the build-up to the 2019 general election will remain the key focus for the authorities.



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