The resilience of Nigeria’s Purchasing Managers Index (PMI) in the last 28 months have continued to surprise experts even upon negativities surrounding the Nigerian macroeconomic landscape, ranging across (1) unrelenting security challenges especially in the North, (2) lack of policy actions due to the delayed cabinet formation, (3) weak consumer spending, and (4) weak output growth.
Above all, Nigeria’s composite PMI remained strong in expansionary territory.
PMI is a measure of the prevailing direction of economic trends in manufacturing. The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity
Business Hilights recalls that while the CBN’s recently released PMI survey showed that the index was only marginally higher (+0.2 points to 58.2) compared to last month’s reading, driven by both manufacturing (+0.2 points) and non-manufacturing (+0.1 points) segments, it has sustained its expansionary trend for twenty-eight straight months.
Having survived the most critical periods, industry analysts are upbeat that for the next few months, there are no sufficient reasons for the composite PMI index to nosedive into contractionary terrain.
This is in the light of the still stable FX market and moderating input prices, both of which should continue to drive positive business sentiments.
Codros Capital, leading investment analysis group are of the view that “Beyond the obvious, sustained expansionary PMI readings provide some support to our positive 2019FY GDP forecast, which we expect will be driven by both the oil and non-oil sectors. Overall, we expect 2019FY GDP growth to print 2.21% (2018FY: 1.91% y/y).”
