Five Best Performing Sectors from Q2’17 National Accounts


Thursday, September 07, 2017 / 11:44 AM / FBNCapital Research

From the national accounts for Q2 2017 we highlight the five best performing sectors. We cover only those sectors accounting for at least 1% of GDP at constant basic prices, and exclude other services. The data show agriculture expanding by 3.0% y/y and industry by 1.5% while services contracted by -0.9%.

Industry returned to positive growth because of crude petroleum and natural gas, which expanded by 1.6% y/y after six quarters’ contraction. The performance of agriculture was the weakest for more than two years, and a disappointment in view of the reforms. 

There are no steady performers in the non-oil economy (other than agriculture), indicating that there is no momentum for a strong recovery. Transportation and storage, the strongest performer y/y in Q1, contracted. Its place has been taken by financial and insurance, which posted very modest growth in Q1. The information and communications sector contracted. We cannot therefore identify sectors set to deliver a recovery. 

We talk of a tentative recovery because trade, the second largest sector of the economy, again contracted, as it has every quarter since Q1 2016. It is the most reliable measure of demand across all income levels.  

Manufacturing was boosted by the 2.7% y/y growth of its largest segment (food, beverages and tobacco). The segment has benefited more than most from the greater availability of fx under the CBN’s multiple currency practices. We do not see any dramatic improvement in demand: rather, the sector has been able to restore output with its access to more, and more competitively priced imported inputs.

For the challenge to explain public administration’s first growth for more than two years, we suspect that the headcount has been stable and productivity has marginally improved. 

Related News
1.       Q2’17 GDP: Nigeria Creeps out of Recession
2.      Finally, an End to the Recession
3.      Stanbic IBTC Holdings Q2 2017 Results Review - Likely Easing of Cost of Risk In H2 Bodes Well
4.      GDP Growth Up to 0.55% - Too Soon to Cheer
5.      Nigeria on a U-Shaped Recovery
6.      PMI - Marginally Slower Economic Expansion in August
7.      Manufacturing PMI Stands at 53.6% in August 2017 from 54.1% in July 2017 - CBN
8.     August 2017 Purchasing Managers' Index: Six Months In Positive Territory
9.      Nigerian Economy Emerges from Recession; GDP Grows by 0.55% in Q2’17 from -0.91% in Q1’17
10.  Headline Inflation to Slide Marginally to 16.03% In August 2017
11.   A Recovery in Capital Imports in Q2 2017
12.  We See an Uptick in Headline Inflation to 16.3% YoY in August – FBNQuest
13.  Headline Inflation Declined Marginally to 16.05% in July
14.  President Buhari Receives Briefing, Delighted at Improving State of the Economy
15.   CPI Drops to 16.05% in July 2017, 0.05% Lower Than 16.10% June Rate

Related News