The PMI data for November was below expectations, but this will not have a big impact on the market, said Liu Dongliang, an analyst at China Merchants Bank. The latest PMI data showed slower increases in new business and output, while subdued demand growth led firms to keep workforce numbers broadly unchanged.
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On the price front, input prices rose for the tenth month running in November.
FBN Capital, the economic think-tank expressed the sentiments following the launch of its Manufacturing Purchasing Managers’ Index (PMI) for Nigeria on Tuesday.
Five of the eight manufacturing sub sectors expanded in November, up from four in October, with food and beverages being the one that moved into positive territory.
“Mirroring the trend for new orders, production increased at the softest pace in the current 25-month sequence of expansion”, it added.
The rise in the services sector is likely to have been driven by online sales over Singles Day on 11 November, said Nomura in a note.
Services have been the main driver of economic expansion, and Markit said this would need to be the case again, if the economy were to grow at the 0.6% quarterly rate which the government has forecast for the final three months of 2015.
Business conditions are not expected to be any better in the short term.
A decrease in purchasing costs was largely responsible for the figures, with the rate of deflation among the fastest seen in the index’s 24-year history.
United States crude oil prices steadied after volatile trading overnight in which they first rallied and then erased gains after a survey estimated higher Organisation of the Petroleum Exporting Countries (Opec) output.
Factory gate charges were, subsequently raised. But, the rate of contraction was only marginal.
The PMI’s component indexes showed widespread weakness in manufacturing, with new orders – a proxy for domestic and foreign demand – down 0.5 points at 49.8 and exports contracting to 46.4 for the 14th straight month.
“Output was matched by a marked fall in new work intakes, and in fact, the rate of decline was the quickest in the series history to date”. While investment goods producers saw a rebound in November, the consumer goods sector remained the bright spot.
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“The slowdown in growth combined with weak inflationary pressures support further rate cuts”, Ms. De Lima said.
