Nigeria’s manufacturing sector slowing contraction—PMI

The Manufacturing Purchasing Managers’ Index (PMI), for the month of October, indicating a slowing of contraction as it stood at 49.4 index points.

This was disclosed by the Central Bank of Nigeria (CBN), in its October PMI report released on its website. According to the CBN “The Manufacturing PMI in the month of October stood at 49.4 index points, indicating slowing contraction in the manufacturing sector compared with the last five months. Of the 14 sub-sectors surveyed, 6 sub-sectors reported expansion, above 50% threshold, in the review month in the following order: Electrical equipment, Transportation equipment, Printing & related support activities, Chemical & pharmaceutical products, Textile, apparel, leather & footwear and Cement. The remaining 8 sub-sectors reported contractions in the following order: Primary metal, Petroleum & coal products, Paper products, Fabricated metal products, Furniture & related products, Nonmetallic mineral products, Plastics & rubber products and Food, beverage & tobacco products”.

Continuing the report further said “at 50.0 points, the production level index in October 2020 for the manufacturing sector indicating halting in contraction which commenced since May 2020. Of the 14 sub-sectors surveyed, 7 sub-sectors recorded expansion in production level, 1 sub-sector maintained current level, while 6 sub-sectors recorded declines in production in October 2020. The new orders index expanded at 51.2 points from contraction in the previous month. Four sub-sectors reported expansion in new orders, 4 sub-sectors were stationary, while the remaining 6 recorded contractions in the review month”.

According to the CBN “the manufacturing supplier delivery time index stood at 51.8 points in October 2020. This indicates that supplier delivery time is faster for the sixth consecutive month. Six of the 14 sub-sectors recorded improved suppliers’ delivery time, 5 sub-sectors reported stationery level, while 3 sub-sectors recorded slowing delivery time. The employment level index for October 2020 stood at 46.0 points, indicating contraction in employment level for the seventh consecutive month. Of the 14 sub-sectors, 3 sub-sectors recorded growth in employment level in the review month; 2 sub-sectors recorded stationary level of employment, while the remaining 9 sub-sectors recorded lower employment levels in the review month. At 46.2 index points, the manufacturing sector inventories contracted for the seventh time in October 2020. 

“Two of the 14 sub-sectors recorded growth in inventories, while the remaining 12 sub-sectors recorded lower raw material inventories in the review month. PMI for the non-manufacturing sector stood at 46.8 points in October 2020, indicating contraction in Non- manufacturing PMI for the seventh consecutive month. Of the 17 sub-sectors surveyed, 3 sub-sectors reported growth in the following order: Electricity, gas, steam & air conditioning supply; Art, entertainment & recreation and Health care & social assistance. Eleven sub-sectors reported declines in the following order: Management of companies; Utilities; Information & communication; Construction; Professional, scientific, & technical services; Repair, Maintenance/Washing of Motor Vehicles…; Wholesale/Retail trade; Educational services; Transportation & warehousing; Accommodation & food services and Real estate rental & leasing. While 3 sub-sectors Agriculture; finance & insurance and Water supply, sewage & waste management were stationary. At 48.7 points, the business activity index declined for the sixth consecutive month, indicating contraction in non-manufacturing business activity in October 2020. Three out of the 17 sub-sectors reported growth in business activities, above 50% threshold, in the review month; while 11 sub-sectors recorded decline in business activity and 3 sub-sectors were stationary in October 2020. 

“At 47.8 points, new orders index declined for the seventh time in October 2020. Six of the 17 sub-sectors reported growth in new order (above 50% threshold) in the review month, 1 sector reported stationary level, while the remaining 10 sub-sectors recorded decline in new orders in the review month. The employment level Index for the non-manufacturing sector stood at 44.2 points, indicating contraction in employment level in October 2020. All 17 sub-sectors reported decline in employment level (below 50% threshold) in the review month. At 46.3 points, non-manufacturing inventory index declined for the seventh consecutive month. Four sub-sectors reported growth in inventory, 2 sub-sectors recorded stationary inventories while the remaining 11 sub-sectors recorded decline in inventories in the review period.”