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NIGERIA PMI - Slightly brisker economic expansion in June

Slightly brisker economic expansion in June                                                                     

Data from the Central Bank of Nigeria (CBN) intimated positive signals for the Nigerian economy in June as the apex bank’s Purchasing Managers’ Indices (PMI) expanded at a quicker pace than in the preceding month.                                                                   

Manufacturing PMI registered at 57.0, compared to 56.5 in May, and the quickest pace of expansion since January, buoyed by accelerations in Production Level (58.8 to 59.2), New Orders (54.4 to 56.2), and Employment Levels (55.2 to 55.4). On a more bearish note, Quantity of Purchases made by manufacturers contracted in the month, which may either indicate slowing demand growth or an expectation of weaker demand in the future. Non-manufacturing also expanded at a slightly brisker pace (57.3 to 57.5), as Business Activity (58.7 to 59.1), New Orders (55.9 to 56.4), and Employment Levels (55.6 to 55.9) grew more robustly, whilst growth in Raw Material Inventories decelerated (59.2 to 58.5).                                                                    

No material change in economic momentum can be read from recent PMI data, so we are reserved in our expectations concerning economic performance in Q2’18 and Q3’18. The manufacturing sector should continue to grow, but the services sector would likely be weighed by large industries such as real estate. Meanwhile, the outlook for agriculture is weaker than it has been in a long time as a result of the crisis in the Middle Belt.