By Modupe Gbadeyanka
Data released by the Central Bank of Nigeria (CBN) on Wednesday, March 1, 2017, has revealed that the Manufacturing Purchasing Managers’ Index (PMI) declined to 44.6 index points in February 2017 from 48.2 points it was in January 2017.
The apex bank, in its latest report, which was obtained by Business Post, noted that this indicates declines in the manufacturing sector for two consecutive months after an incidence of expansion in December 2016.
It stated further that 14 of 16 sub-sectors reported declines in the review month in the following order: transportation equipment; paper products; electrical equipment; printing & related support activities; fabricated metal products; chemical & pharmaceutical products; furniture & related products; cement; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear; computer & electronic products; nonmetallic mineral products and primary metal.
However, the appliances & components and food, beverage & tobacco products subsectors reported expansion in the review period.
According to the CBN, in the period under review, the production level index for manufacturing sector contracted, staying at 45.2 points, indicating a decline in production level when compared to the 51.3 points in the previous month.
The report said 12 manufacturing sub-sectors recorded declines in production level during the review month in the following order: electrical equipment; paper products; transportation equipment; chemical & pharmaceutical products; plastics & rubber products; furniture & related products; fabricated metal products; printing & related support activities; computer & electronic products; primary metal; textile, apparel, leather & footwear and cement. The petroleum & coal products sub-sector remained unchanged, while the appliances & components; food, beverage & tobacco products and non-metallic mineral products recorded growth in production.
Also, the CBN disclosed that employment level index in the month of February 2017 stood at 41.7 points, indicating declines in employment level for the 24th consecutive month.
However, the index declined at a faster rate when compared with the level in the preceding month. Of the sixteen sub-sectors, 14 recorded declines in the following order: transportation equipment; electrical equipment; printing & related support activities; computer & electronic products; chemical & pharmaceutical products; fabricated metal products; petroleum & coal products; appliances & components; furniture & related products; textile, apparel, leather & footwear; nonmetallic mineral products; plastics & rubber products; paper products and cement. The primary metal sub-sectors remained unchanged, while only the food, beverage & tobacco products sub-sector recorded growth during the review period.
Similarly, the composite PMI for the non-manufacturing sector declined for the 14th consecutive month.
The index stood at 44.5 points, indicating a faster decline when compared to the 49.4 points in January 2017.
Of the 18 non-manufacturing sub-sectors, 15 recorded declines in the following order: construction; professional, scientific, & technical services; water supply, sewage & waste management; accommodation & food services; public administration; arts, entertainment & recreation; real estate, rental & leasing; utilities; wholesale trade; information & communication; finance & insurance; repair, maintenance/washing of motor vehicles…; health care & social assistance; electricity, gas, steam & air conditioning supply and transportation & warehousing.
The management of companies remained the same, while the educational services and agriculture reported increase in the review month.
Every month, the CBN conducts a survey of purchasing and supply executives of manufacturing and non-manufacturing organizations in 13 locations in Nigeria: two states in each of the six geo-political zones, and the FCT.
Results of the survey are used to compute the monthly Purchasing Managers’ Index (PMI) and that of this month was conducted from February 13 to 21, 2017 with a total of 1,755 responses received from a sample of 1,950 respondents, representing a response rate of 90.0 percent.
The apex bank makes no representation regarding the individual companies, other than that stated by the respondents and data contained further provides input for policy decisions.
The Manufacturing and Non-Manufacturing PMI Report on businesses is based on data compiled from purchasing and supply executives. Survey responses indicate whether there is change or no change in the level of business activities in the current month compared with the previous month.
For each of the indicators measured, this report shows the diffusion index of the responses. The diffusion index is computed as the percent of positive responses plus one-half of the percent of those reporting no change. The composite PMI is then computed as the weighted average of five diffusion indices for manufacturing sector: production level, new orders, supplier delivery time, employment level and raw materials inventory, with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively.
The composite PMI for non-manufacturing sector is computed from four diffusion indices: business activity, new orders, employment level and raw materials inventory, with equal weights of 25% each.
A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally declining.
The sub-sectors reporting growth are listed in the order of highest to lowest growth. For the sub-sectors reporting contraction/decline, they are listed in the order of the highest to the lowest decline.
