Nigeria economy recovering in convincing form

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…Gross Domestic Product (GDP) up by 0.55% (year-on-year) in real terms

TUE, SEPTEMBER 5 2017-theG&BJournal-The Purchasing Managers’ Index (PMI) Survey Report conducted by the Statistics  Department  of  the  Central  Bank  of  Nigeria during the period August 7-11, 2017, shows the economy is recovering in convincing form.

The August report showed strong improvements almost across the board. That went from Production Level through to business activity, Non-manufacturing Inventory and the employment level, often a very mixed bag in the past.

The National Bureau of Statistics report published today also confirmed the recovery. The statistics office reports that in the second quarter of 2017, the nation’s Gross Domestic Product (GDP) grew by 0.55% (year-on-year) in real terms, indicating the emergence of the economy from recession after five consecutive quarters of contraction since Q1 2016.

This growth, the office says is 2.04% higher than the rate recorded in the corresponding quarter of 2016 ( –1.49%) and higher by 1.46% points from rate recorded in the preceding quarter, (revised to –0.91% from –0.52%). Quarter on quarter, real GDP growth was 3.23%.

During the quarter, aggregate GDP stood at N26,986,005.20million in nominal terms, compared to N23,547,466.91 million in Q2 2016, resulting in a Nominal GDP growth of 14.60%.

But economists warn that the threat to the economic growth still remains, whatever the short term improvement in market conditions, ranging from the high cost of regulation and the burdens of bureaucracy to the dysfunctional electricity sector.

Statistics  Department  of  the CBN indicates that Production level, new orders and employment level are growing at a slower rate; while supplier delivery time and inventories responded positively at a faster rate in August 2017.  The Manufacturing  PMI stood  at  53.6 index  points  in August 2017,  indicating  expansion  in  the manufacturing  sector for  the  fifth consecutive  month.

Twelve of  the 16 subsectors  reported  growth  in the  review  month including  the computer and  electronic products; appliances and components, chemical and pharmaceutical products, non metallic  mineral products as well as  food,   beverage   & tobacco  products,  cement  and plastics   and   rubber   products.  In contrast, the transportation equipment, primary   metal,   petroleum   & coal   products   and   fabricated metal products showed some contraction.

Surprisingly, the production level index for manufacturing sector grew for the sixth consecutive   month in August2017. At 57.4 points, the index indicated an increase in production at a slower rate though, when compared to its level in the preceding month.

Equally growth was recorded on employment level, indicating four consecutive months of growth. The index showed a 51.1 percent growth across most sectors to underscore the improvements achieved in the manufacturing sector.

The composite PMI for the non-manufacturing sector stood at 54.1 points during the period under review, indicating growth in Non-manufacturing PMI for the fourth consecutive month. Business activity index also showed growth, although moderated. But the 56.1 points gain indicates five consecutive months of growth. Non-manufacturing Inventory ended the month at 52.3points, a four month consecutive rise reflecting higher inventories. All of these in also reflected in the growth business activity index which stands currently at 56.1 percent.

“I believe the days of legally guaranteed confidentiality is gradually creeping back,” one economist told theG&BJournal. “By and large, the mood is happier than it has been in a long time,” he added.

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