FX liquidity, stronger demand drive expansion in Nigeria’s PMI
ACCORDING TO THE CEN TRAL BANK OF NIGERIA’S (CBN) purchasing managers’ index (PMI), business activities in the manufacturing and non- manufacturing sectors remained robust, recording stronger readings in December 2018.
The PMI expanded to 61.1 index points from57.9 points in November, for the manufacturing sector in the month of December, indicating expansion for the twenty-first consecutive month, while PMI for the non-manufacturing sector grew to 62.3 points in December 2018 from 58.4 points in November 2018.
The CBN’s PMI report indicated that production level, new orders, supplier delivery time, employment level and inventories grew at a faster rate in December 2018 when compared with previous month with thirteen of the 14 subsectors surveyed reporting growth.
The growth according to analysts was fuelled by continued efforts by the apex bank in sustainingforeignexchangeliquidity and stronger demand due to the festive season, thus driving positive business sentiments.
The sectors for manufacturing that reported growth includes the transportation equipment; furniture & related products; printing & related support activities; textile, apparel, leather & footwear; plastics & rubber products; chemical & pharmaceutical products; food, beverage & tobacco products; nonmetallic mineral products; paper products; fabricated metal products; cement; electrical equipment; and petroleum & coal products.
The primary metal subsector recorded decline in the review period.
In the non-manufacturing PMI report, business activities showed growth in new orders, employment level and inventories.
The composite PMI for the non-manufacturing sector expanded for the twentieth consecutive months, with all the 17 surveyed subsectors recorded growth in the following order: repair, maintenance/washing of motor vehicles; information & communication; water supply, sewage & waste management ; wholesale/retail trade; professional, scientific, & technical services; accommodation & food services; arts, entertainment & recreation; electricity, gas, steam & air conditioning supply; utilities; finance & insurance; agriculture; transportation & warehousing; educational services; construction; real estate rental & leasing; management of companies; health care & social assistance.
Amidst the fiscal crises facing the country and threatening its ability to meet its financial obligations, economic management experts and analysts have decried the fiscal authorities helplessness and below par contribution to the economic re-engineering of the country in the last three years.
The experts worry about the country’s unabating fiscal crises such as the suffocating debt crisis, contracting revenue sources, volatility in the foreign exchange receipt of the country owing to its monocultural economic structure, among others.