PMI reading no 56: nine months above water

Our manufacturing Purchasing Managers’ Index (PMI), the first in Nigeria, eased in November to 60.1 from 64.8. Our partner, NOI Polls, has gathered and compiled the data. The index is found in developed markets (such as the ISM’s in the US), larger emerging markets such as China and a few other frontiers. It is based upon manufacturers’ responses to set questions on core variables in their businesses. In line with best practice, we are releasing our report on the first working day of the month.

• PMIs are forward-looking indicators of sentiment in all economies, and have the proven capacity to move financial markets in developed economies. To reinforce the point, the latest national accounts cover the third quarter (July-September) and the latest PMI the second month of the fourth.

• In the unweighted model of our choice (the ISM’s), respondents are asked  whether output, employment, new orders, suppliers’ delivery times and stocks of purchases have improved on the previous month, are unchanged or have declined. A headline reading of 50 is neutral. We have posted nine negative readings since our launch in April 2013, the latest in January this year.

• Our sample is an accurate blend of large, medium-sized and small companies.