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Latest CBN’s PMI shows notable expansion in most sub-subsectors

Latest data on Purchasing Managers Index (PMI) report for September, released by the Central Bank of Nigeria (CBN) has revealed rising capacity expansion in most sub-subsectors of the economy. This therefore affirms Nigeria’s exit from recession.

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on data compiled from purchasing and supply executives’ responses. Survey responses indicate whether there is change or not in the level of business activities in the month in review compared with the previous month. A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, and any point below 50 indicates a contraction.

The report released weekend indicated that 29 subsectors out of the 34 subsectors surveyed in the manufacturing and non-manufacturing sectors recorded growth in activities during the month.

According to the report, September Manufacturing PMI stood at 55.3 index points indicating a rapid expansion relative to 53.6 index points recorded in August.

Business Hilights recalls that the figure represents the sixth consecutive month of expansion since the last contraction recorded in March, 2017 when the economy was still in recession.

CBN averred that since March, the economic activities in the sector have accelerated by about 16 per cent.

MPI report noted that “14 of the 16 subsectors in the manufacturing sector reported growth in the review month with the highest growth recorded in: appliances and components; electrical equipment; chemical and pharmaceutical products subsectors, while, primary metal and petroleum and coal products subsectors contracted in the review month”.

“The new orders index grew for the sixth consecutive month at 53.5 points, while, the supplier delivery time for the sector, rose for the fourth consecutive month recording an index of 55.4 points.

“The employment level index in September 2017 stood at 52.8 points, indicating growth in employment level for the fifth consecutive month. While at 56.4 points, raw materials inventories index grew for the sixth consecutive month, and at a faster rate when compared to its level in August 2017,” the report added.

Besides, composite PMI for the non-manufacturing sector for September stood at 54.9 points up from 54.1 index points recorded in August, indicating growth in Non-manufacturing PMI for the fifth consecutive month.

“Of the 18 non-manufacturing subsectors, 15 recorded growth, with the highest subsector growths in: utilities; agriculture; health care & social assistance; finance and insurance subsectors, while the construction; management of companies; and professional, scientific & technical services sub sectors recorded contraction in the review period.

“The business activity index rose marginally to 56.8 points in September 2017, indicating growth for the sixth consecutive month. The index grew at a faster rate, when compared to its level in the preceding month, while new orders index at 55.4 points grew for the sixth consecutive month.

Part of the reasons that aided the MPI rise include easing access to forex sustained by encouraging rise in global oil prices which also contributed in small measure in the early exit from recession in the first instance.