Nigeria PMI July 2016


PMI ticks up in July from June's record low

In July, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from June’s all-time low of 47.3 to 48.8. Despite July’s increase, the indicator remains the 50-threshold that separates contraction from expansion in business conditions.

July’s mild improvement reflected a slower contraction in new orders and output. Moreover, the pace of expansion in employment and purchasing activities gained steam in the same month. Costs and charges grew at weaker rates, albeit they remained elevated, signaling that inflation will continue to trend up in the coming months. Commenting on the result, Stanbic IBTC Bank analysts added that, “perhaps an explanation for the improved sentiment in consumer and business activity can be traced to the recent reforms implemented by authorities especially in the foreign exchange market. Indeed, after a likely contraction in growth during the first half of the year, it is expected that recent reforms in the FX market aimed at attracting net capital inflows will finally be able to boost domestic investment and consequently growth.”

FocusEconomics Consensus Forecast panelists expect gross fixed investment to fall 2.4% in 2016, which is down 3.1 percentage points from last month’s forecast. For 2017, panelists forecast an expansion of 5.2%.

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Nigeria PMI Chart

Nigeria PMI July 2016

Note: Purchasing Managers’ Index. Readings above 50 indicate an expansion in business conditions while readings below 50 point to a contraction.
Source: Stanbic IBTC Bank Nigeria and IHS Markit.

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