Nigeria: Nigerian PMI surges to over two-year high in August
September 5, 2017
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from 54.8 in July to 55.0 in August, marking an over two-year high. As a result, the indicator lies comfortably above the 50-point threshold that separates expansion from contraction in business conditions for the eighth month running.
August’s result was driven by robust growth in output and new orders. The domestic market fueled the expansion, as new export orders contracted for the second consecutive month. As a result of greater economic activity, August saw an uptick in job creation. On the price front, input price inflation eased slightly in August, although output price inflation increased.
IHS Markit analyst Ayomide Mejabi offered a nuanced assessment of the economic situation: “That being said, a more sustainable and robust economic growth trajectory will be dependent on implementation of structural reforms as outlined in the Economic Recovery and Growth Plan (ERGP) as well as an easing in monetary policy stance. Although the PMI suggests that input price pressures continue to moderate, albeit at a slow pace, output price inflation rose for the second consecutive month. This change in the output price path confirms our suspicion that disinflation in Nigeria should moderate over coming months.”
Author: Oliver Reynolds, Economist