A newly published Central Bank of Nigeria survey on purchasing and supply executives from manufacturing and non-manufacturing businesses revealed expansions in both the manufacturing and non-manufacturing businesses; thus reinforcing optimism of an imminent economic rebound from recession.
The boost in real sector activity could be partly attributed to improved business confidence hinged on recent favourable policies by the economic managers to improve the business environment – policies such as improving foreign exchange supply, facilitating sector-specific credit, ease of doing business, etc.. According to the survey, the manufacturing composite PMI stood at 52.5 index point in May 2017 (better than 51.1 index point in April 2017), the second consecutive expansion.
The increase in manufacturing composite PMI was driven by expansion in new orders, to 50.5 in May (faster than 50.1 in April); sustained expansion in production level to 58.7 in May (from 58.5 in April); and an expansion in purchase of raw materials inventories, to 50.8 in May, following an expansion of 50.6 in April. In the same vein, the index for employment showed an expansion, to 50.7 in May (from a contraction of 46.6 in April) while supplier delivery times lengthened, to 49.9 (albeit, slower than 47.5), possibly due to decreased slack at input suppliers’.
Expansion in input prices increased at a slower pace to 68.4 (from 69.2), thus having a material pass-through impact on output prices which also expanded slower to 61.3 (from 65.1). Of the sixteen manufacturing subsectors under survey, ten sectors recorded expansions – manufacturers of ‘Petroleum & coal products’,
‘Cement’, ‘Food, beverage & tobacco products’ and ‘Textile, apparel, leather & footwear’ recorded expansions: of 62.1 (from 48.9), 54.7 (from 52.1), 54.4 (from 55.9) and 54.9 (from 54.1) respectively.