Business activities in Africa’s largest economy expanded for the ninth consecutive month in December, according to the Central Bank of Nigeria report released for the month.
The manufacturing Purchasing Managers’ Index expanded by 59.3 in December, better than the 55.9 recorded in November.
Fifteen of the sixteen subsectors surveyed recorded growth in the following order: petroleum and coal products; textile, apparel, leather and footwear; cement; transportation equipment; paper products; food, beverage and tobacco products; furniture and related products; plastics and rubber products; nonmetallic mineral products; printing and related support activities; appliances and components; chemical and pharmaceutical products; fabricated metal products; primary metal and electrical equipment.
But, the computer and electronic product subsector contracted in December, partly due to the holiday and fuel scarcity that crippled business activities towards the end of the month.
Still, manufacturing production surged for the tenth consecutive month in December, expanding at 63.2 from 59.3 in November. Suggesting that growing demands is aiding manufacturing production.
Employment Index climbed slightly to 53.9 in December, from 53.7 in November. While this is above the 50 level that separates expansion from contraction, it also reflects weak job creation in the economy when compared to the pace of production growth. Meaning, the rate of job creation is not proportional to the surge in business activities, which further explains the 18.8 percent unemployment rate recorded in the nine-month through September 2017.
Therefore, “it’s either the employees were overworked to sustain production capacity or the data is faulty, I choose the former,” Dr. Tunde Olayanju asserted.
Similarly, the gauge for new orders jumped to 60 in the month, up from 54.3 in November. Also, the ninth consecutive month of high demands from thirteen of the sixteen subsectors surveyed.
“Improved economic activities are yet to reflect on the labour market, another indication of over-concentration on money market by both domestic and foreign investors. Therefore, while business confidence is growing among established manufacturers, new investment in the sector is low, hence, lack of new job creation,”