Nigeria’s private-sector activity expanded for the third consecutive month in August, but the recovery remained uneven as 11 of 16 industrial subsectors contracted, the Central Bank of Nigeria said.
The CBN’s August Purchasing Managers’ Index (PMI) rose to 52.7 points from 51.1 in July, indicating an expansion in overall business activity. A PMI reading above 50 signals expansion, while below 50 indicates contraction.
The improvement was supported by stronger activity in the services and agricultural sectors, while the industrial sector only recorded a marginal expansion.
Industrial Sector Remains Under Pressure
The industry PMI rose to 50.6 points in August, its first expansion after contracting since April.
However, only five of the 16 industrial subsectors expanded, while 11 contracted.
Motor vehicles and assembly recorded the weakest performance at 34.6, followed by non-metallic products at 41.3, electricity, gas, steam and air conditioning at 42.9, and chemical and pharmaceutical products at 43.9.
Oil refining, however, recorded a strong 66.5 PMI, while electrical and electronics and mining and quarrying both recorded 59.5.
The industry’s new orders index fell below the expansion threshold to 49.0, while raw-material inventories stood at 49.4, suggesting continued weakness in demand and production inputs.
Services, Agriculture Sustain Growth
The services sector strengthened to 53.3 from 51.1, with nine of 11 subsectors expanding.
Administrative and support services led the sector at 58.9, while finance and insurance recorded 55.8 and information and communication 54.3.
Agriculture also remained in expansion, recording 53.4 points and extending its growth streak to 25 consecutive months. All five agricultural subsectors expanded, although the farm-yield index declined to 49.7.
At the broader level, the composite output index rose to 53.9, while new orders and employment stood at 51.8 and 52.4 respectively.
Despite the improvement in business activity, price pressures remained significant, with the composite input-price index at 62.5 and output-price index at 58.9 in August.
The August PMI therefore points to a continuing recovery in private-sector activity, but the contraction across most industrial subsectors shows that the improvement is yet to translate into a broad-based recovery in Nigeria’s productive economy.
