In spite of global trade tensions and delays in the appointment of key officials to kick start the economy, business activities remained positive as the Purchasing Managers Index (PMI) for the month of July showed expansion in the economy.
Reports released by the Central Bank of Nigeria (CBN) yesterday showed that Manufacturing PMI stood at 57.6 points as businesses maintained optimism in the Nigerian economy.
According to the Business Expectations Survey report, outlook of businesses on the volume of total order, business activity and financial conditions (working capital) were positive in July.
While firms identified insufficient power supply, high interest rate, financial problems, unfavourable economic climate, unclear economic laws and insufficient demand as major factors constraining business activity in July 2019, they remained optimistic on the economy of the country.
Businesses surveyed said they expect the naira to appreciate in the over the next 12 months, while the level of inflation is expected to increase slightly in both the next six to 12 months. They also anticipate a spike in borrowing rate in the current month, fall next month and increase in the next 12 months.
Meanwhile, Manufacturing PMI for July was an improvement over 57.4 points that was recorded in June indicating expansion in the manufacturing sector for the 28th consecutive month.
The index grew at a faster rate when compared to the index in the previous month. Of the 14 sub sectors surveyed, 13 reported growth in the review month in the following order: petroleum & coal products; transportation equipment; cement; printing & related support activities; paper products; food, beverage & tobacco products; furniture & related products; fabricated metal products; nonmetallic mineral products; plastics & rubber products; primary metal; chemical & pharmaceutical products; and electrical equipment. The textile, apparel, leather & footwear sub sector recorded decline in the review period.
At 58.9 points, the production level index for the manufacturing sector grew for the 29th consecutive month in July 2019. The index indicated a slower growth in the current month, when compared to its level in the month of June 2019. New orders index grew for the 28th consecutive month at 57.2 points indicating an increase in new orders in July 2019. Eleven sub sectors reported growth, one remained unchanged, while two contracted in the review month
The employment level index of Manufacturing PMI for July 2019 stood at 57.3 points, indicating a growth in employment level for the 27th consecutive month. Of the 14 subsectors, 10 reported increased employment level, one reported unchanged employment level, while three reported decreased employment in the review month.
The composite PMI for the non-manufacturing sector stood at 58.7 points in July 2019, indicating expansion in the Non-manufacturing PMI for the 27th consecutive month. The index grew at a faster rate when compared to its level in June 2019. All 17 surveyed subsectors recorded growth in the following order: management of companies; arts, entertainment & recreation; finance & insurance; repair, maintenance/washing of motor vehicles and construction.
Others are: real estate rental & leasing; agriculture; health care & social assistance; information & communication; accommodation & food services; wholesale/retail trade; water supply, sewage & waste management; transportation & warehousing; electricity, gas, steam & air conditioning supply; professional, scientific, & technical services; educational services; and utilities.
New orders and inventories grew at a faster rate, while business activity and employment level grew at a slower rate in July.
At 57.6 points, the business activity index grew for the 28th consecutive month, indicating expansion in non-manufacturing business activity in July 2019. Sixteen sub sectors recorded growth in business activity, while one remained unchanged in the review month.