The Central Bank of Nigeria (CBN) recently published its monthly purchasing managers’ index (PMI) report for March, which indicated an acceleration in the level of economic activities in Nigeria when compared to the preceding month.
Compartmentalizing the PMI data, the manufacturing PMI increased for the 24th consecutive month to settle at 57.4 points (previously: 57.1 points), predicated on the substantial level of growth recorded in eleven of the fourteen subsectors that make up the index. Likewise, the Non-manufacturing PMI improved and remained positive for the 23rd consecutive month to settle at 59.5 points (previously: 58.4) on the backdrop of growth recorded in fourteen of the seventeen subsectors that make up the index.
Commenting on the data, the reasons for the positive reading could be tied to the just concluded elections. We recall that the PMI index declined in February – most likely due to the uncertainties around the political climate at the time. Hence, the relatively positive March reading could be an indication of better economic realities post-election. Overall, If the historically strong correlation between PMI and GDP growth is anything to go by, we should expect a positive Q1-19 GDP reading.