Monday, December 04,
2017 / 09:01AM /Proshare Research
manufacturing Purchasing Managers’ Index (PMI), the first in Nigeria, eased in
November to 60.1 from 64.8. Our partner, NOI Polls, has gathered and compiled
index is found in developed markets (such as the ISM’s in the US), larger
emerging markets such as China and a few other frontiers. It is based upon
manufacturers’ responses to set questions on core variables in their
businesses. In line with best practice, we are releasing our report on the
first working day of the month.
are forward-looking indicators of sentiment in all economies, and have the
proven capacity to move financial markets in developed economies. To reinforce
the point, the latest national accounts cover the third quarter
(July-September) and the latest PMI the second month of the fourth.
In the unweighted model of our choice (the ISM’s), respondents are
asked whether output, employment, new orders, suppliers’ delivery times
and stocks of purchases have improved on the previous month, are unchanged or
have declined. A headline reading of 50 is neutral. We have posted nine
negative readings since our launch in April 2013, the latest in January this
Our sample is an accurate blend of large, medium-sized and small
We have added “trigger” questions, which apply when the respondent has
the same answer on a sub-index for two months and then changes it for the
All five sub-indices fell in November: the lowest was 53.5 (employment).
This was a reality check. The headline reading has been above 50 since March.
The principal driver has been the CBN’s use of multiple currency
practices, which has transformed fx liquidity. Manufacturers, or indeed any
users of fx, now have access through the various windows. This is evident from
the PMIs but also inflation data and listed company results.
The positive impact of MCP has gained momentum since July. Weekly
turnover on the investors’ and exporters’ window (NAFEX) has risen to about
US$1bn. A more recent boost has been the seasonal rise in demand for the
year-end celebrations. This featured in several responses to trigger
questions for the October and November reports.
Manufacturing contracted by -2.9% y/y in Q3 2017. However, we can see
the momentum of the improved fx availability in the q/q growth for the two
largest sub-sectors: food, beverages and tobacco (0.6%), and textiles, apparel
and footwear (7.5%).