The FBN Quest October manufacturing Purchasing Managers’ Index (PMI), for Nigeria showed a recovery to 52.9 from 47.9 in September.
PMIs are forward-looking indicators of sentiment, and have the proven capacity to move financial markets.
In the PMI survey model, respondents are asked whether output, employment, new orders, delivery times and stocks of purchases have improved on the previous month, are unchanged or have declined.
A reading of 50 is neutral while above 50 is positive and below negative. There have been four negative headline readings this year.
The sample is an accurate blend of large, medium-sized and small companies.
Unusually, all five sub-indices showed an improvement in October with the striking trend for all sub-indices being the shift from a decline to an unchanged reading.
“This headline reading takes us back roughly to where we were in August (52.2). Subject to the usual caveat about the difficult operating environment, we suggest that the marked shift towards unchanged readings could indicate that companies are adjusting to the additional challenge of fx shortages,FBN Quest analysts said.
”For GDP we see further contraction (of -1.7% y/y) in Q3 2016. The figure could look rather better if the oil economy surprises on the upside. This is a challenging call, given the lack of a single official date source for oil production. For Q4 we see GDP flattish on a y/y basis. The pick-up in capital releases from the 2016 budget by the FGN should then start to make an impact.”
