NIGERIA’S manufacturing sector closed out 2024 on a positive trajectory, with the Purchasing Managers’ Index (PMI) rising to 52.70 points in December. This uptick, as reported by Stanbic IBTC Bank, signals a moderate expansion in manufacturing activities, pointing to a promising outlook for the sector in the new year.
According to the Stanbic IBTC Bank Nigeria PMI report for December 2024, the country’s PMI increased for the second consecutive month, climbing to 52.7 from 49.6 in November 2024. Notably, a PMI reading above 50 indicates an improvement in private sector activities. Although Nigeria’s PMI had been below the 50-point threshold for the past five months, the December reading suggests a turnaround.
The surge in demand during the festive season was a key driver of the improved PMI, leading to growth in new orders and sustained employment and output growth, consistent with observations from the previous month. This outcome aligns with earlier forecasts, underscoring the resilience of Nigeria’s manufacturing sector.
Analysts are optimistic about the implications of the positive PMI, suggesting that it signals growth in the manufacturing sector, which will contribute to Q4 2024 GDP growth and sustain it above 3 percent. This development is a welcome boost to Nigeria’s economy, which has faced various challenges in recent years.
The improved PMI reading is also expected to have a positive impact on employment and output in the manufacturing sector. As demand continues to grow, manufacturers are likely to increase production and hire more workers, which will help to reduce unemployment and stimulate economic growth.
The rise in Nigeria’s manufacturing PMI to 52.70 points in December 2024 according to analysts, is a positive development that suggests growth in the sector.
As the economy continues to evolve, it is essential to monitor the PMI and other economic indicators to gain insights into the sector’s performance and its contribution to the country’s economic growth.
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