Nigeria: PMI reaches 16-month high in April
May 4, 2017
In April, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from 53.0 in March to a 16-month high of 53.6. The indicator lies above the 50-point threshold that separates expansion from contraction in business conditions for the fourth month running after a bout of 11 months in contractionary territory.
April’s reading was underpinned by greater output and new orders, as firms enjoyed improved demand, business conditions and order books. Nigerian firms also received more export business for the first time in over a year, contrasting the marked decline in exports seen at the end of last year. As a result of an easing of input price inflation, output prices also rose by a smaller amount than in March. However, despite a more upbeat economic panorama, firms didn’t increase hiring last month, with uncertainty still remaining over the state of the economy.
According to IHS Markit analyst Ayomide Mejabi, “The sustained upward trajectory of the PMI in the first 4 months of the year certainly suggests that private sector business conditions continue to improve. […] The economic growth outlook for the rest of the year would appear moderately more positive, especially if authorities are able to implement recent foreign exchange reforms in conjunction with other structural and fiscal reforms.”
Author: Oliver Reynolds, Economist