The Sales Managers' Index: Nigeria Economic Growth Continues Slowdown Ahead of Presidential Election

SMI reflects rapid but slower activity in February, business Confidence falls slightly but remains high, and staffing levels rise for the first time in five months according to World Economic reports released on February 26, 2015.

The Nigeria Sales Managers’ Index (SMI) acclaimed as the most up to date assessment of economic activity in Nigeria, providing the only available monthly economic indicator covering all sectors of the Nigerian economy.
The Headline Index – calculated from an average of the Confidence, Market Growth, Sales, Prices and Staffing Indexes – posted 61.1 in February, down from 62.2 in January. This signals the sixth consecutive month of declines and the lowest level.

Business Confidence
The Business Confidence Index, which measures how Sales Managers’ expect the economy to perform over the coming months, edged down slightly to 78.4 in February, from 78.7 in January. This marks the sixth successive month of declines but indicates that despite the continuing fall in business sentiment, panelists remain very positive about the outlook for business. Panel members have expressed concerns over the forthcoming presidential election, security issues and the recent drop in oil prices.

Market Growth
Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, fell to 59.0 in February, from 61.8 in January. This indicates that surveyed managers continued to experience strong levels of market expansion but that the pace of increase continues to decline. That said, the latest reading represents the sixth successive month of decline.
Product Sales
Product Sales Index, which represents sales made by panellists’ own companies, fell to 54.4 in February, from 59.5 in January. The Index has been falling sharply for the past four straight months, similar to the recent declines seen in the Business Confidence and Market Growth Indexes. Nevertheless, current value of 54.4 in February shows that monthly sales remain growing at a strong pace.
Prices Charged
Prices Charged Index rose to 57.7 in February, from 55.3 in January, signaling the sharpest increase in three months of successive increases and the quickest pace since March 2014. This suggests that prices charged to business and consumers remain rising at a steady pace and that inflationary pressures continue to build up across the country.
Staffing Levels
Staffing Index, which reflects the number of staff taken on compared to the same period last year, rose for the first time in five months. The Index registered a value of 55.8 in February, up from 55.4 in January, indicating only a marginal increase and that labour conditions in Nigeria continue to improve.
World Economics Chief Executive Ed Jones says, “The February Headline Index for Nigeria shows that the country continues to grow at a rapid pace but that an on-going deceleration in economic activity has become evident. This can be mainly attributed to a continuing weakness in market growth and product sales. Although the rate of decline in business confidence was marginal overall, the Index has been falling successively for the past six months.
Despite this, the majority of Sales Managers are still very optimistic about the future business climate of the country.”