Nigeria PMI March 2017


Nigeria: Nigerian PMI reaches 15-month high in March

April 5, 2017

In March, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from 52.2 in February to a 15-month high of 53.0. The indicator lies above the 50-threshold that separates expansion from contraction in business conditions for the third month running after a bout of 11 months in contractionary territory.

Manufacturing PMI closed the first quarter on a positive note with the indicator logging its third consecutive expansion and resting above its long-run average. March’s print was driven by strong growth in new orders and output supported by improving economic conditions. Both subcomponents expanded at the fastest rate in years, reflecting increased investment and sustained demand growth. Another welcoming sign was that staffing levels in Nigerian firms increased for the first time since October 2016 to accommodate increased demand. Regarding price developments, manufacturers passed on higher prices to consumers as input costs rose in the surveyed month.

Commenting on the three consecutive increases and how these translate into the economy, IHS Markit analyst Ayomide Mejabi stated that, “the sustained rise of the Stanbic IBTC Bank Nigeria PMI through the first quarter of 2017, suggests that private sector business conditions continue to gradually improve and should result in a moderate improvement in the real GDP growth rate. Such an improvement will largely be reflective of some recovery in oil price/production as well as continuing strong performance in agriculture”.

FocusEconomics Consensus Forecast panelists expect gross fixed investment growth to reach 0.8% in 2017, which is unchanged from last month’s forecast. For 2018, panelists forecast an expansion of 3.9%.

Author: Jean-Philippe Pourcelot, Economist

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Nigeria PMI Chart

Nigeria PMI March 2017 1

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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