PMI remains stronger as economic outlook stands on positive trend

The nation’s economic outlook was boosted by positive numbers of the November Purchasing Manager Index survey report as well as the relatively early passage of the 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) by the National Assembly.
The recent survey report on purchasing and supply executives from manufacturing and non-manufacturing businesses released by Central Bank of Nigeria showed sustained expansions in both the manufacturing and non-manufacturing businesses.
The boost in real sector activity according to experts could be partly attributed to growing demand for goods and services on the back of improving purchasing power domestically. This, coupled with favourable ongoing economic reforms to improve the business environment, led to a strengthening of business sentiment.
The reforms also include recent efforts by monetary authority at improving foreign exchange supply to end users.
The survey showed that the manufacturing composite PMI stood at 55.9 index points in November 2017 against 55.0 index points the previous month. The faster increase in manufacturing composite PMI was driven by accelerated expansion in production level, to 59.3 in November from 58.4 reported in October; faster expansion in new orders to 54.3 from 52.8, and slower contraction in new export orders at 37.6 from 35.5 in the October this year.
In addition, the report stated that there was faster growth in employment to 53.7 compared with 53.1 in the previous month; there was also faster expansion in purchase of raw materials/inventories, to 57.1 from 56.5; while supplier delivery times shortened, to 56.0 more than 55.5 point, possibly due to improved capacity at input suppliers.
Expansion in input prices increased to 64.3 from 62.7.
The survey report indicated that output prices followed expanded slower to 54.0 from 55.4 as manufacturers could not transfer rising input cost on to the final consumer.
However, of the 16 manufacturing sub-sectors under survey, 12 sectors recorded expansions, the same as in the preceding month.
The report further showed– manufacturers of „Textile, apparel, leather & footwear, „Food, beverage & tobacco products, „Petroleum & coal products and “Cement recorded expansions standing at 60.6, 57.4, 65.0 and 52.5 respectively from 57.6, 55.3, 43.3 and 46.7 reported in October this year. On the other hand, the non-manufacturing sector extended its advance as the non-manufacturing composite PMI increased to 57.6 in November 2017 compared with 55.3 in October 2017.
The growth according to the CBN survey was partly driven by expansion in business activity and incoming business to 59.4 in September, faster than 57.5 in October and 58.4 faster than 55.7 respectively while work in progress expanded faster to 58.0 from of 53.4 reported the previous month.

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