Main conclusions:
- Strong first headline reading of 59.6
- Highest reading for stocks of purchases
- Lowest for employment and new orders
- Track record required to identify trends
We today launch our manufacturing Purchasing Managers’ Index (PMI) for Nigeria, which takes the temperature of the sector at monthly intervals. Our PMI will join a number of existing surveys of business and consumer expectations. We hope that it will develop into a core forward economic indicator for analysts, policymakers and financial market players. In time we would like to introduce a services PMI.
A PMI is a simple exercise. A selection of companies is asked their view each month on core variables in their business. The respondent, who is characteristically the purchasing manager in a larger firm, has three possible replies: better, unchanged or worse than the previous month. According to the standard methodology, 50 marks a neutral reading and anything higher suggests that the manufacturing economy is expanding. Readings are released at the very beginning of the new month.
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