LAGOS: THE upcoming festive season and Nigeria President Buhari Muhammadi 's recent appointment of a new cabinet have been projected to boost business confidence as the year draws to an end. FBN Capital, the economic think-tank expressed the sentiments following the launch of its Manufacturing Purchasing Managers' Index (PMI) for Nigeria on Tuesday.
The firm said its latest headline reading showed a pick-up from 52,6 posted in the previous month. "This modest improvement is consistent with our view on GDP," FBN said. It said in the last quarter of the year, firmer household demand on the back of seasonal festivities (Christmas) was expected.
"Macro challenges remain but business confidence is likely to improve as members of the newly formed Federal Executive Council begin to unveil both general and sectoral policy direction." The PMI, said the think-tank, took the temperature of the sector. "Our PMI, which was the first in Nigeria, joins a number of existing surveys of business and consumer confidence and expectations. It has become a core forward indicator for analysts, policymakers and financial market players."
According to FBN, GDP growth in the third quarter of the year picked up slightly to 2,8 year-on-year. "Although a modest recovery, the figures remain poor."
The manufacturing sector contracted by -1,8 percent compared with -3,8 percent in the previous quarter. The sector represented 9,3 percent of constant price GDP in Q3, and its largest segment is food, beverages and tobacco, which accounted for 4 percent of total GDP.
SOURCE: CAJ NEWS AGENCY