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FBN Capital releases fifth purchasing managers’ index

By on September 8, 2013

The FBN Capital Limited, a subsidiary of the FBN Holdings Plc, has released the fifth monthly reading of its manufacturing Purchasing Managers’ Index (PMI) for Nigeria.
The PMI is an exercise that conducts research into different companies’ perspectives, on core variables in their distinctive businesses every month.

Purchasing managers in larger firms are selected as representatives of their firms in the exercise. They are then given three choices on whether they believed performance in the previous month was better, unchanged on worse.

The frequently used method of reading results rates 50 as a flat reading. Higher rates imply expansion in the manufacturing company. The results of readings are shared at the beginning of the following month.

“In our case, the five variables are output, employment, new orders, delivery times from suppliers and stocks of purchases. They have equal weightings in our index, and respondents are asked to adjust their replies for seasonal factors. Our sample covers a good cross-section of the sector with large, medium-sized and small firms,” the report stated.

FBN“Since this is only the fifth reading, we cannot identify long-term trends. On our next (sixth) reading, we will seek to draw some broad conclusions. Initially, we will need to be tentative in making those conclusions in view of the unfamiliarity of some respondents with such exercises. We should add that the flaws in the provision of official statistics in Nigeria will complicate our task of commenting on the overall economy on the basis of the PMI readings.

“Our fifth headline reading of 55.2 marks an improvement after three successive declines since our maiden reading of 59.6 in April. In July the index moved into negative territory, at 49.4, which we viewed as the impact of a deterioration of power supplies on the readings for output and stocks of purchases,” the report read.

The report went on to state that the sector had experienced over 6% growth annually, since 2003.

FBN Capital Limited, was formed from the union of FBN Holdings subsidiaries – First Trustees, FBN Capital, First Funds and FBN securities. The group offers investment banking services, asset management and other financial needs of their clients.

 

 
[Nigerian Telegraph]