Manufacturing PMI Records First Contraction in 37 Months—CBN

By Dipo Olowookere

For the first time in 37 months, the Purchasing Managers’ Index (PMI) of the manufacturing sector in Nigeria contracted last month.

The Central Bank of Nigeria (CBN), which announced the manufacturing PMI in its monthly report, stated that in the month of May 2020, the manufacturing PMI stood at 42.4 index points.

For the past 36 consecutive months, the index has expanded until last month and according to the apex bank, of the 14 surveyed subsectors, only the electrical equipment sector reported growth (above 50 percent threshold) in the review month.

The CBN said the remaining 13 subsectors reported declines in the following order cement; petroleum & coal products; printing & related support activities; furniture & related products; textile, apparel, leather and footwear; paper products; fabricated metal products; food, beverage & tobacco products; chemical & pharmaceutical products; transportation equipment; plastics & rubber products; non-metallic mineral products; appliances and components and primary metal.

Also, in the month, the production level, at 44.5 points for the manufacturing sector, declined for the first time in 38 months.

The central bank said one subsector recorded increased production level, four remained unchanged, while nine subsectors recorded declines in production in May 2020.

In addition, the employment level index for May 2020 stood at 24.5 points, indicating decline in for the second month. Of the 14 subsectors, one subsector remained unchanged, while the remaining 13 subsectors recorded lower employment level in the review month.

For the non-manufacturing PMI, it contracted for the second month at 25.3 points in May 2020. The index declined below the turning point of 50 points.

All of the 17 subsectors surveyed subsectors recorded declines (below the 50 percent threshold) in the following order: construction; repair, maintenance/washing of motor vehicles; electricity, gas, steam & air conditioning supply; educational services; agriculture; finance & insurance; information & communication; water supply, sewage & waste management; accommodation & food services; real estate, rental & leasing; professional, scientific, & technical services; wholesale trade; health care & social assistance; management of companies; transportation & warehousing; arts, entertainment & recreation; and utilities.