Real sector easing out of recession as March PMI increases to 56.7 per cent
The cries by the oragnised private sector that even though the nation has exited recession, the manufacturing sector is still held by the scourge is fading away gradually as March 2018 Purchasing Managers’ Index (PMI) data show sustained improvement in manufacturing and non-manufacturing activities during the month.
The PMI is an indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
Both manufacturing and non-manufacturing PMIs expanded at a faster pace to 56.7 and 57.2 respectively.
The latest data, in addition to halting two consecutive months of slowed expansion, strengthens the case reiterating that manufacturers and business owners’ optimism about the economy is stronger than it was a year ago.
Juxtaposed with January and February data, the numbers under review, as a leading indicator, bolster expectation for sustained output growth in the first quarter of 2018.
Analysts at Cordros Capital Limited say they see the likelihood of (1) positive corporate performance in Q1-18, (2) renewed interest in risky assets, amid (3) stronger expectation for lower yields on government securities.
According to them, “It is difficult to expect contracting PMIs over 2018, as the impact of the positive drivers supporting the encouraging figures deepens further”.
