Transport by far the best performer
From the national accounts for Q1 2017 we highlight the five best performing sectors. Although the economy was still contracting in Q1, we are covering the better performers because we see that a modest recovery is underway. We cover only those sectors accounting for at least 1% of GDP at constant basic prices. The data show agriculture expanding by 3.4% y/y, and industry and services contracting by -4.2% and -0.2%. Industry was dragged down by the -11.5% y/y contraction in mining and quarrying, which is dominated by oil and natural gas.
We talk of a modest recovery because trade, the second largest sector of the economy, declined by -3.1% y/y. Trade is the most reliable measure of demand across all income levels.
The fast growing sector y/y was transportation and storage. The road transport component, comfortably the largest in the sector, expanded by 12.4% y/y. Given what we have observed with trade, what we see are the fruits of the FGN’s capital spending.
This administration broadly shares the same reforming agenda for agriculture as its predecessor. It is therefore disappointing that the sector’s growth was the weakest since Q1 2016.
Probably the most encouraging development was the return of manufacturing to growth after seven quarters of contraction in the previous eight. We would like to identify a pick-up in consumption but the latest national accounts by demand date from Q2 2016. More likely, we are seeing the early impact of the CBN’s new fx interventions, which began in March.
Sources: National Bureau of Statistics (NBS); FBNQuest Research
Information and communications, dominated by mobile telephony, maintained its steady run of uninterrupted growth.