Business/Finance

Nigeria’s Manufacturing Sector contracts for 6th Consecutive Month – CBN

Christopher A. Uba

Access Bank

The Manufacturing Purchasing Managers’ Index (PMI), for the month of October, witnessed a contraction for the 6th consecutive month, as it stood at 49.4 index points, according to the Central Bank of Nigeria (CBN) October PMI report released on Tuesday.

The report states that despite the fact that the Manufacturing Purchasing Managers’ Index (PMI) for the month of October contracted, the Manufacturing PMI index recorded a month-on-month increase owing to improved New orders, faster manufacturing supplier delivery time, and slight changes in production and employment levels.

It stated that, out of the 14 subsectors surveyed, six  subsectors reported expansion (above 50 per cent threshold) in the review month in the following order: electrical equipment , transportation equipment, printing & related support activities, chemical & pharmaceutical products, textile, apparel, leather & footwear, cement.

The remaining eight subsectors reported contraction (below 50% threshold) in the review month in the following order: primary metal, petroleum & coal product paper products, fabricated metal products, furniture & related products, nonmetallic mineral products, plastics & rubber products food, beverage & tobacco products.

The Purchasing Managers Index is a measure of the prevailing direction of economic trends in manufacturing. It is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity.

The value and movements in the PMI and its components can provide useful insight to business decision makers, market analysts, and investors, and is a leading indicator of overall economic activity in Nigeria and other parts of the world.

PMI for the non-manufacturing sector stood at 46.8 points in October 2020, indicating contraction in Nonmanufacturing PMI for the seventh consecutive month. Of the 17 sub-sectors surveyed, 3 subsectors reported growth, while 11 subsectors declined.

The PMI, in September 2020, witnessed a contraction for the fifth consecutive month, as it stood at 46.9 index points.

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