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Five Best Performing Sectors from Q3’17 National Accounts; Agriculture Out at the Front

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Thursday, November 23, 2017 09:45AM /FBNQuest Research 

From the national accounts for Q3 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. We are measuring performance in q/q terms on an experimental basis although the data from the NBS are not seasonally adjusted. The idea is to form an impression from the unadjusted data whether sectors have established any momentum in response, for example, to reforms. We had agriculture and manufacturing in mind in this experiment.
  

Agriculture achieved double-digit growth q/q in Q2 and close to 40% in Q3. Harvest patterns are clearly the driver, and we cannot discern the impact of the FGN’s reforms without a lot more data.
 

For manufacturing we were looking for evidence that the much enhanced fx availability was reflected in output. Given the strong signals from our manufacturing PMI reports since March, we had hoped to find q/q growth rather higher than the 2.6% shown in the chart.
 

Of the three largest manufacturing sub-sectors, both food, beverages and tobacco, and cement managed growth in Q3 below the sector as a whole. In contrast, textiles, apparel and footwear achieved close to 8% q/q. Investment in backward integration, support for cotton growers from state governments  and fx availability for machinery could all have played a part.
   

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Real estate was the sixth best performing sector in Q3 2017, lagging manufacturing by less than 50bps in our calculations.
 Among the worst performing sectors in Q3, we note information and communications, which we can attribute to the dislocation in the telecoms industry, and financial and insurance. 

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