October 24, 2018

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Economic Growth Rate Softens

Economic Growth Rate Softens

The Central Bank of Nigeria’s (CBN’s) Purchasing Managers Index, PMI, as it pertains to the manufacturing sector stood at 56.2 in September 2018. The PMI indicates further fluctuation against 57.1 recorded in the month of August.

Similarly, the non-manufacturing sector PMI, stood at 56.5. This is against 58.0 which was recorded in August. This also points to a tottering economy.

The PMI measures the level of economic activities across manufacturing and non-manufacturing sectors, where the various leading companies in the sectors and sub-sectors turn in their activity levels in response to CBN’s questionnaire month-on-month.

Before the past few months, the PMI was on a fourteen month consecutive rise until May this year. It was then the month-on-month fluctuation began until September.

The non-manufacturing sector PMI had buckled in February this year after the 11th month consecutive growth in January.

Though the sector index began to recover in March, but it has still remained unable to come to the January peak up till the latest decline.

The Apex Bank said in a report, “The Manufacturing PMI in the month of September, stood at 56.2 index points, indicating expansion in the manufacturing sector for the eighteenth consecutive month. The index however grew at a slower rate when compared to the index in the previous month.”

Among the 14 subsectors in the manufacturing sector surveyed, 10 reported growth in the review month in the following order: Electrical equipment; Printing & related support activities; Transportation equipment; Non-metallic mineral products; Chemical & pharmaceutical products; Fabricated metal products; Furniture & related products; Textile, apparel, leather & footwear; Food, beverage & tobacco products; and Plastics & rubber products. The Petroleum & coal products; Cement; Paper products; and Primary metal subsectors declined in the review month.”

The CBN’s report further stated, “The composite PMI for the non-manufacturing sector stood at 56.5 points in September 2018, indicating expansion in the Non-manufacturing PMI for the seventeenth consecutive month. The index grew at a slower rate when compared to that in August 2018.”

Fifteen of the 17 subsectors in the non-manufacturing sector recorded growth in the following order: Educational services; Management of companies; Information & communication; Agriculture; Finance & insurance; Water supply, sewage & waste management; Wholesale/Retail trade; Real estate rental & leasing; Utilities; Accommodation & food services; Transportation & warehousing; Electricity, gas, steam & air conditioning supply; Professional, scientific, & technical services; Health care & social assistance; and Repair, Maintenance/Washing of Motor Vehicles.

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