Manufacturing sector down 2.63%; trade, 1.38%; IT up 1.11% in Q3 2016

The latest data of the National Bureau of Statistics (NBS) has revealed that  the Real GDP growth of the manufacturing sector slowed by 2.63 per cent points in the third quarter of 2016, to -4.38 per cent (year-on-year) from –1.75 per cent growth recorded in third quarter of 2015.

Growth was 1.02 per cent points lower than rates recorded in the second quarter of 2016. On a quarter-on-quarter (seasonally unadjusted) basis, the sector increased by 6.28 per cent.

Nominal Gross Domestic Products (GDP) growth of manufacturing in the third quarter of 2016 was recorded at –2.93 per cent (year-on-year), 7.73 per cent points lower than the 4.80 per cent recorded in the corresponding period of 2015.

This is partly due to the continued fall in the exchange rate, which makes imported inputs more expensive, thereby increasing business costs. This is greatly as a result of continued fall in naira to dollar rate which translates to much higher cost of business operations.

Growth also reflected a drop from the second quarter of 2016 by 1.91 per cent which was recorded at –1.02 per cent. On a quarter-on-quarter basis, the sector grew by 8.49 per cent. Contribution of Manufacturing to Nominal GDP was 8.59 per cent in the third quarter of 2016, lower than the 9.67 per cent recorded in the corresponding period of 2015, and 8.95 per cent in the second quarter of 2016.

Trade’s year on year growth stood in real terms at –1.38 per cent, which was 5.79 per cent points lower than the rate recorded one year previous, also 1.35 per cent points lower than in the preceding quarter.

Quarter on quarter growth stood at 1.62 per cent in the third quarter of 2016. In real terms, Trade’s contribution to GDP was 16.39 per cent in the third quarter of 2016, marginally higher than the 16.24 per cent it represented in the previous year, but lower than the 17.57 per cent recorded in 2016 second quarter.

Its year on year grew by 15.36 per cent in the third quarter of 2016 in nominal terms. This was 0.69 per cent higher than in the same quarter of the previous year, and higher by 0.13 per cent points compared to the rate recorded in the preceding quarter.

Quarter on quarter growth was 6.00 percent. Trade’s contribution to Nominal GDP in the third quarter was recorded at 19.83 per cent; this is higher than the contribution in the same quarter of the previous year of 18.78 per cent, but lower than in the preceding quarter recorded at 21.16 per cent.

The Information and Communication sector composed of the four activities of Telecommunications and Information Services; Publishing; Motion Picture, Sound Recording and Music Production; and Broadcasting  the sector grew by 1.11 per cent in real terms, year on year in the third quarter of 2016.

In nominal terms, the sector grew by 9.26 per cent  (year-on-year) in the third quarter of 2016, this is a 1.15 per cent points decline from the rate of 10.41 per cent recorded in the same quarter of 2015, and 15.91 per cent points higher than rate recorded in the preceding quarter.

Publishing was the activity to exhibit the highest nominal growth rate in the period of review, at 21.38 per cent. The quarter on quarter growth rate was recorded at –11.27 per cent. The Information and Communications sector contributed 9.90 per cent to total Nominal GDP in the third quarter of 2016, same rate as recorded in the same quarter of 2015, but lower than the 12.62 per cent it contributed in the preceding quarter.

From the rate recorded in the corresponding period of 2015, this was 4.16 point lower and also lower by 0.25 per cent points when compared with rate recorded in the second quarter of 2016.

The main driver of this growth was Telecommunications & Information services and broadcasting. Quarter on Quarter, the sector exhibited growth of –12.84 per cent in real terms. Of total real GDP, the sector contributed 10.14 per cent in 2016 third quarter, higher than in the same quarter of the previous year, but lower than the preceding quarter, in which it represented 9.80 per cent and 12.68 per cent of the totals respectively.