Manufacturing PMI declines 1.6 Points in Sept to 46.9 points ~CBN
Despite the lifting of lockdown imposed in the wake of the outbreak of the coronavirus pandemic, the Central Bank of Nigeria (CBN) on Wednesday said the Manufacturing PMI contracted at 46.9 index points in September, for the fifth consecutive time.
In its latest report on PMI, the regulatory bank said Composite PMI declined by 1.6 points in September to 46.9 points from 48.5 points in August.
“Of the 14 subsectors surveyed, 4 subsectors reported expansion (above 50 percent threshold) in the review month in the following order: electrical equipment; transportation equipment; cement and nonmetallic mineral products.
“The remaining subsectors reported contractions in the following order: petroleum & coal products; primary metal; furniture & related products; printing & related support activities; food, beverage & tobacco products; textile, apparel, leather & footwear; chemical & pharmaceutical products; fabricated metal products and plastics & rubber products; while paper product subsector was stable,” the CBN report stated.
The regulatory bank conducts a monthly survey to gauge the changes in the level of business activities in a month compared with the previous month.
The composite PMI above 50 is an indication that the manufacturing and non-manufacturing economy is expanding, while 50 PMI is an indication that there was no change while below 50 showed that activities in the economy is contracting.
The report showed that the non-manufacturing sector PMI stood at 41.9 points in September 2020, also indicating contraction in nonmanufacturing PMI for the sixth consecutive month.
“Of the 17 sub-sectors surveyed, 3 subsectors reported growth in the following order: water supply, sewage & waste management; arts, entertainment & recreation and professional, scientific, & technical services, while the remaining 14 subsectors reported declines in the following order: management of companies; repair, maintenance/washing of motor vehicle; agriculture; finance & insurance; electricity, gas, steam & air conditioning supply; accommodation & food services; information & communication; health care & social assistance; real estate, rental & leasing; educational services; wholesale trade; transportation & warehousing; utilities and construction,” the CBN said.
At 47.3 points, the production level index for the manufacturing sector also indicated contraction in September, according to the CBN report.
Of the 14 subsectors surveyed, 5 subsectors recorded increased
production level, 1 subsector reported same level of production, while 8 subsectors recorded declines in
production in September 2020
At 46.4 points, the new orders index contracted in September 2020 for the fifth consecutive month. Six
subsectors reported expansion in new orders, while the remaining 8 recorded contractions in the review
The bank said the employment level index for September 2020 stood at 44.1 points, indicating contraction in
employment level for the sixth consecutive month.
“Of the 14 subsectors, 2 subsectors recorded growth in employment, 3 subsectors recorded same level of employment, while the remaining 9 subsectors recorded lower employment level in the review month
Also, the manufacturing sector inventories index contracted for the sixth consecutive time. At 43.0 points, the
index declined in the review month. Four of the 14 subsectors recorded growth in inventories, while the remaining 10 subsectors recorded lower raw material inventories in the review month.
Analysts attributed the decline in manufacturing and non-manufacturing PMI to the dollar shortage currently being experienced in the country.
The CBN has been rationing dollar on the domestic forex market to end-users due to the decline of foreign exchange reserves.