Local production suffers continued contraction as PMI hits 44.9%
Purchasing Managers’ Index (PMI) for the manufacturing sector has continued to reflect the sector’s weaknesses as regards production, new orders, and employment levels.
According to the latest data released by the Central Bank of Nigeria (CBN), manufacturing PMI in the month of July stood at 44.9 index points, indicating contraction in the manufacturing sector for the third consecutive month.
Of the 14 surveyed subsectors, the transportation equipment subsector reported growth (above 50% threshold) in the review month, while the non-metallic mineral products sector reported no change.
However, the remaining 12 sub-sectors reported contraction in the following order, printing & related support activities; primary metals; fabricated metal products; paper products; food, beverage & tobacco products; chemical & pharmaceutical products; furniture & related products; electrical equipment; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear and cement.
In July, supplier delivery time was faster, while production level, new orders, employment level and raw materials inventories contracted.
At 44.7 points, the production level index for the manufacturing sector also declined in July for the third consecutive month.
One subsector recorded increased production level; four remained unchanged, while nine subsectors recorded declines in production this month.
As regards new orders, the new orders index showed contraction for the third consecutive month at 43.1 points, last month. It however grew by 6.7 points above the level recorded in June 2020. Two sub-sectors reported expansion, 3 remained unchanged while 9 subsectors recorded contraction in the review month.
In terms of delivery, the manufacturing supplier delivery time index stood at 56.4 points this month, indicating faster supplier delivery time for the third consecutive month. Ten of the 14 subsectors recorded improved suppliers’ delivery time; two subsectors reported no change, while the remaining 2 recorded slower delivery time in the month.
Similarly, the employment level index for July stood at 40.0 points, indicating a decline for the fourth consecutive month. Of the 14 subsectors, three subsectors remain unchanged, while the remaining 11 subsectors recorded lower employment levels in the review month.
At 43.2 points, the manufacturing sector inventories index contracted for the fourth consecutive month this month. Three of the 14 subsectors recorded growth in inventories; two remained unchanged, while the remaining nine subsectors recorded lower.