New Survey Report Shows Manufacturing Rate In Nigeria Is On Increase

April 27, 2019

A new PMI Survey Report shows a better performance for the Nigerian Manufacturing Sector in April. This is for the 25th consecutive time in a row. The PMI Survey Report is contained in a report released by Central Bank of Nigeria (CBN) for the month of April 2019. The report shows the manufacturing sector in Nigeria improved more during the period under review.

Key Analysis From The Figures:

The report shows expansion in the manufacturing sector for the twenty-fifth consecutive month and at the quickest rate since January.

Faster Rises Were Seen As:

  • Production output (increased to 58.8 from 58.3 in March),
  •  Total new orders (increased to 57.2 from 56.7), 
  • Employment in the manufacturing sector (increased to 57.0 from 56.9); 
  • Raw materials available to manufacturing companies (increased to 57.5 from 57.1). 

The Red Light:

  • The report shows that fewer export orders were made, as total export order fell more deeply (to 37.4 from 47.9)
  • Inflation also hit input prices for most factories as input price inflation accelerated (to 60.2 from 57.6)
  • Total stocks of finished goods went up at a slower pace (to54.4 from 60.7).
  • Inflation, however, lessened on output charge for most factories (to 52.4 from 62.3) 
  • Overall, Manufacturing PMI in Nigeria averaged 51.70 from 2014 until 2019, reaching an all time high of 61.10 in December of 2018 and a record low of 41.90 in June of 2016.
Forecast Data Chart

Growing Sectors:

All the 17 sub-sectors surveyed recorded growth. Among others are management of companies; real estate rental & leasing; construction; wholesale/retail trade; agriculture; health care & social assistance; finance & insurance; professional, scientific, & technical services and educational services.

What Rising PMI Means For Every Economy:

 International investors coming into every country usually study the PMI (Purchasing Managers’ Index) to determine the most current economic situation in the country.  

PMI is usually the most closely observed business surveys in the world. It’s relied on by most countries’ central banks, including the US Federal Reserve, European Central Bank and Bank of England for providing the most accurate advance signals of changing economic growth and inflation.

Essentially, in predicting GDP growth, a sustained reading of higher than 42.0 PMI is considered to be the benchmark for economic expansion, while a sustained reading of below 42.0 could indicate that an economy is heading into a recession.

The Composite Manufacturing PMI measures the performance of the manufacturing sector and is derived from a survey of purchasing and supply executives from 13 locations in Nigeria. The survey shows the change, if any, in the current month compared with the previous month

Click here to download the full report.

Also See: Nigerian Bank of Agriculture is Open For New Investors

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

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