Nigeria’s manufacturing sector expanded for the 25th consecutive month, according to the Purchasing Managers’ Index (PMI) survey report released by the Central Bank of Nigeria (CBN) for the month of April 2019.
A statement from the Nigerian Investment Promotion Commission (NIPC) quoted CBN’s report as indicating that the Manufacturing PMI in the month of April stood at 57.7 index points, depicting an expansion in the manufacturing sector for the period under review.
The statement also revealed that the non-manufacturing sector expanded with the composite PMI at 58.7 points, although the index growth slowed for the 25th consecutive month. The CBN report shows that the manufacturing sector grew at a faster rate when compared to the index in the previous month.
Other sub-sectors which witnessed growth in the month under review are electrical equipment, plastics and rubber products, cement, petroleum and coal products, transportation equipment, food, beverage and tobacco products, and non-metallic mineral products.
The report showed that the Manufacturing Suppliers’ Delivery Time index stood at 58.1 points in April 2019, indicating slower supplier delivery time. Employment Level index for April stood at 57 points indicating growth in employment level for the 24th consecutive month.
Raw materials Inventories index for the manufacturing sector growth for April stood at 57.5 points, indicating growth in inventory index for the 28th consecutive month, the index grew at a faster rate when compared to its level in March.
New Order index grew at 59 points for the 24th consecutive month in April. Of the 17 sub-sectors surveyed, 15 recorded growth in new orders, while two remained unchanged in the review month. The Employment Level index for the non-manufacturing sector stood at 59.5 points indicating growth in employment for the 24th consecutive month. At 59.5 points, non-manufacturing inventory index grew for the 24th consecutive month, indicating growth in inventories in the review period.
Meanwhile, a sustained reading of below 42.0 could indicate that an economy is heading into a recession, while the difference between 42.0 and 50.0 can indicate the strength of an economic recovery and vice versa for a decline in GDP.
Having become the most closely watched business surveys in the world, the rising PMI suggests that the Purchasing Managers’ Index is an indispensable market indicator for international investors looking to form an opinion on economic growth.
Basically, when it comes to predicting GDP growth, a sustained reading of higher than 42.0 PMI is considered to be the benchmark for economic expansion.
Hence, with Nigeria’s inflation rate further declining for the third consecutive month as reported earlier, Nigeria’s economy has tendencies for growth going into the second quarter of 2019, and growing manufacturing sector is key.