Nigeria’s Economy Sees First Expansion in 13 Months
The Central Bank of Nigeria’s Purchasing Managers’ Index (PMI) report for August 2024 has brought a much-needed boost to the country’s economy, with businesses recording their first expansion in 13 consecutive months. According to the report, the composite PMI stood at 50.2 index points, indicating expansion in economic activities for the first time in 13 months of contraction.
The Services Sector, which has been a key driver of growth, recorded expansion for the third consecutive month, while the Agricultural Sector registered expansion for the first month. The Industry Sector, although contracted, saw a slower contraction compared to the previous month.
Breaking down the numbers, 17 sub-sectors out of 36 reviewed reported growth, with Primary Metal recording the highest growth. Output, new orders, and stock of raw materials all indicated growth, while suppliers’ delivery time remained stationary. Employment, however, registered a decline.
Further analysis showed that 19 sub-sectors reported growth in production, with Primary Metal recording the highest expansion. On the other hand, 14 sub-sectors registered a decline, with non-metallic mineral products reporting the highest decline.
The composite level of new orders index stood at 50.5 points, indicating expansion in the volume of incoming businesses/orders. The business activity index, meanwhile, stood at 51.3 points, signaling growth for the third consecutive month and suggesting improving conditions in the Service Sector.
According to the report, nine sub-sectors out of 14 surveyed reported expansions, while four sub-sectors reported contractions. The repair, maintenance, and washing of motor vehicles sub-sector saw the highest growth, whereas professional, scientific, and technical services recorded the most significant decline.
This welcome news comes as a relief to the Nigerian economy, which has been struggling with contraction for over a year. The expansion is a sign of improving conditions and could potentially lead to increased investment and growth in the country.
