RECESSION? WAIT FOR QUARTER 3, FIGURES.

Those screaming now after the release of Nigeria's gross domestic product for second quarter and inflation rate for July had better get prepared for more gloomy statistics by the third quarter.

This is because the monthly purchasing managers survey report by the Central Bank of Nigeria for August hints at mass decline in manufacturing and non manufacturing indices.

According to the Purchasing Managers Index (PMI) issued August 31, composite index covering manufacturing and non manufacturing hit second lowest levels since July 2014 in August.

The lowest being June this year from which minor recovery occurred in July only to collapse the next month

The composite for manufacturing was 42.1 in August compared to 44.1 in July.

But even this is deceptive because of the items in the basket  input and output prices indices rose by 3.351% and 5.682% respectively and naturally, impact of both is negative, not positive on manufacturing.

There was also 5.672% increase  in supply delivery time index to 57.4 to 51.7.

Of particular interest were the drops in new export orders index by 7.265% to 31.1 from 38.5; new orders index by 4.891% to 37.5 from 42.4 and in employment level by 3.355% to 40.4 from 43.8.

By sector, month on month, top indices decline occurred in computer and electronic (15.435%); transport equipment (11.071%); cement manufacturing (9.766%); petroleum and coal products (8.542%) and appliances and components by 7.5%.

Broken down further, in terms of new orders, indices of transport equipment; computer and electronic; cement and appliances and components dropped by 20% and above with transport equipment leading with 25.397% drop.

However, electrical equipment recorded 28.611% growth in its new orders index followed from a very long distance by chemical and pharmaceuticals' 1.136% increase.

In terms of production, computer and electronic index went down the most by 32.08% followed by petroleum and coal products with 20% and cement and appliances with 10.345% and 10% respectively.

The monthly report is compiled from responses from purchasing and supply managers indicating whether there was change or no change in the current month compared to the previous month in each of the activity items in the composite basket.

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