In February, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) came in at 53.3, a 20-month low and below January’s 54.0. Despite the fall, the PMI lies above the 50-point threshold that separates expansion from contraction in business conditions, pointing to solid growth in the private sector.
Weaker growth in output, new orders and employment drove February’s dip. Output expanded at the softest pace since June 2017 and the pace of new orders growth slowed to a four-month low. That said, client demand remained strong and backlogs of work continued to accumulate in the surveyed month. As a result, firms hired additional staff, albeit at a modest pace. On the price front, input cost inflation came in flat, while output prices moderated compared to January.
Nigeria Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment growth to reach 3.0% in 2019, which is unchanged from last month’s forecast. In 2020, fixed investment is seen increasing 3.5%.
Meanwhile Business Confidence in Nigeria decreased to 25.90 Index Points in January from 30.50 Index Points in December of 2018. Business Confidence in Nigeria averaged 12.76 Index Points from 2008 until 2019, reaching an all time high of 41.10 Index Points in June of 2011 and a record low of -29 Index Points in December of 2016.
Nigeria Manufacturing PMI
The Central Bank of Nigeria Manufacturing PMI fell to 57.1 in February 2019 from 58.5 in the previous month. The reading pointed to the slowest expansion in factory activity since October. Output (57.5 from 59.3 in January), new orders (56.9 from 58.9) and employment (56.3 from 56.4) rose at a slower pace. In addition, export orders continued to decline (39.7 from 41.4). Meantime, purchasing activity (52.1 from 52.5) and raw materials inventories (56.2 from 59.9) increased less while stocks of finished goods went up faster (55.4 from 52.3). In terms of prices, input price inflation eased (60.9 from 62.2) but output charge inflation accelerated (53.7 from 52.5). Manufacturing Pmi in Nigeria averaged 51.49 from 2014 until 2019, reaching an all time high of 61.10 in December of 2018 and a record low of 41.90 in June of 2016.