Market News

The Central Bank of Nigeria (CBN) reported that the PMI index reached 51.0 in December 2024, marking a significant rebound after a period of economic contraction that had persisted for several months. The last report put the PMI at 48.9 as of November last year.

PMI serves as a barometer of the prevailing direction of economic trends across various sectors, including manufacturing and services. This shows that Nigeria’s economy is on a gradual recovery after several months of underperformance.

The report said, “The composite PMI for December 2024 at 51.0 index points indicated expansion in economic activities after two consecutive months of contraction.”

Ht added that the industry sector, which had been in a contractionary position in November, improved to 50.0 index points, reflecting increased production and business activity.

21 subsectors recorded growth during the review month, with the Forestry subsector leading the pack as the highest-performing category. It stated that the surge in forestry activities highlights the growing demand for timber and other forestry products, driven by the construction and manufacturing industries.

In addition, trade and small-scale manufacturing activities posted gains, buoyed by improved consumer spending during the holiday season. The agriculture sector also recorded impressive performance, driven by increased investments in food production and export-oriented farming, adding that 21 subsectors reported growth in economic activities, with Forestry reporting the highest growth during the review month.

However, the report stressed that despite the optimism it portrays, 15 subsectors reported declines in economic activities. Nonmetallic Mineral Products recorded the highest contraction during the period under review.

It attributed the drop to weak demand for construction materials, particularly in regions grappling with infrastructure challenges.

The services sector also experienced mixed performance, with hospitality and entertainment showing robust growth, while other service-oriented businesses lagged due to lingering inflationary pressures and reduced disposable income.

The composite PMI score of 51.0 suggests a steady expansion of economic activities, particularly in manufacturing, agriculture, and services.