CBN reports improved general economic conditions

General economic conditions improved in October 2021, driven by the manufacturing sector, amid a slight decline from the non-manufacturing sector during the month, the Central Bank of Nigeria has said.

The Apex bank said in its Economic Report or October 2021 that the Manufacturing Purchasing Managers Index (PMI) improved by 0.7 points to 47.3 index points, compared to 46.6 index points in September 2021.

It explained that expanded activities in the manufacturing sector prompted new orders and increased production, resulting in increased employment within the period.

“This development was attributed to increased production by firms to meet anticipated demand during the end-of-year festivities.

“On the other hand, the non-manufacturing PMI decreased slightly by 0.3 points to 47.5 index points, compared to 47.8 index points in the previous month,” the report read.

CBN reports improved general economic conditions

Analysis of the data by Business Metrics showed that under the Manufacturing PMI, production level edged up to 45.7 points in October from 46.6 points in September. New Orders saw marginal uptick to 44.1 points from 44 points, and Supplier Delivery Time index hit 56.3 points from 53.1 points.

Meanwhile, as production activities in the sector improved, more hands were employed in October with the employment level index standing at 49.3 as against 48.3 in the preceding month.

The report also showed that more raw materials were put to use during the month, with the Raw Material Inventory settling at 43.8 points from 47.7 points.

Inflation

According to the apex bank, inflation continued to decelerate in October 2021 because of increased agricultural output and improvement in the food supply chain.

Thus, on a year-on-year (YoY) basis, headline inflation moderated to 15.99 per cent, compared with 16.63 per cent in the previous month. On a month-on-month (MoM) basis, it declined to 0.98 per cent from 1.15 per cent

“Overall, the increased output in the agricultural sector that helped moderate food prices was supported, partly, by the various intervention programmes of the Bank and other agencies.

“Core inflation YoY declined to 13.24 per cent, from 13.74 per cent in September. The decline was attributed to an increase in the supply of fish and meat products, following the improvement in the supply chain. On a month-on-month basis, core inflation also decreased to 0.80 per cent in October 2021, from 1.24 per cent in the preceding month.

Oil

Unlike inflation and purchasing managers index, the report showed that domestic crude oil production and export decreased during the month, due to force majeure that led to pipeline shut down.

Specifically, production declined to 1.45 million barrels per day (mbpd) in October 2021, from 1.52 mbpd in the preceding month. This development was attributed to operational setbacks, with key pipelines facing persistent sabotage.

CBN reports improved general economic conditions

According to the report, production concerns plagued the Bonny Light, Escravos, and Forcados, while other significant grades such as Qua Iboe, Brass River, Agbami, Akpo, and Egina remained low.

“Of the 1.45 mbpd produced, exports accounted for an average of 1.00 mbpd, while the balance was for domestic consumption. The average spot price of Nigeria’s reference crude oil, the Bonny Light (34.9° API), stood at 12.8 per cent to US$84.11 per barrel (pb), relative to US$74.55 pb in September, indicating increased receipts to the government in the reporting period.”