The 5 growth drivers for the non-oil sector from Q1 2015 National Accounts


Wednesday, May 20, 2015 8:54 AM / FBN Capital Research

From the national accounts for Q1 2015 we highlight the five fastest growing sectors. We limited our scope to what the NBS terms activity sectors, which are often subdivided into segments, and only those accounting for at least 1% of GDP at constant market prices.

Accommodation and food services emerged as the leading sector, posting growth of 26.7% y/y compared to 23.3% y/y recorded in the corresponding period of the previous year. This expansion could be loosely linked to electioneering, which was at its peak during this period.

In terms of relative contributions to GDP, the trade activity sector accounted for 18% and agriculture 20% of the total. Crop production was the principle driver of agric output, representing 85%.

Although the construction sector posted double digit growth of 11.2% y/y, this was slower than the 17.9% y/y recorded in the previous year. This is the fifth successive quarter in which the sector has achieved double-digit y/y growth (Good Morning Nigeria 15 May 2015).

In spite of the weaker economic output growth in Q1 2015 (4.0% y/y) we note increased housing investment by the new agencies in the industry as well as higher capital expenditure by privatised power sector players. These trends, along with those for small-scale construction, could well have driven the double-digit growth.

The non-oil economy will continue to drive GDP growth in the quarters ahead. We are cautiously optimistic considering the prevailing macro challenges such the oil price (and thus the naira exchange rate), and inflation

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