Omodele Adigun
The manufacturing Purchasing Manager’s Index (PMI) of the Central Bank of Nigeria (CBN) increased to 57.6 points last July from a three-month low of 57.4 in the previous month. This came as new orders rose to 57.2 as against 55.9 in June, and stock of finished goods increased to 51.5 from 51.1 while production was down to 58.2 from 59.3 and employment 57.3 vs 57.5 went up at a softer pace.
Meantime, new export orders dropped further from 41.1 to 38 points. On the price front, both input inflation, 59.5 from 62.7 and output price inflation 52.2 vs 52.4 slowed. Manufacturing PMI in Nigeria averaged 51.99 from 2014 until 2019, reaching an all time high of 61.10 in December of 2018 and a record low of 41.90 in June of 2016.
The Manufacturing and Non-Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the month compared with the preceding month.
The composite PMI level of new orders, suppliers’ delivery time, employment level and raw materials inventory/work in progress, with assigned weights of 25 per cent, 30 per cent, 15 per cent, 10 per cent and 20 per cent, respectively. The composite PMI for the non-manufacturing sector is computed from four indices, namely: business activity, level of new orders, employment level and raw materials inventory, with equal weights of 25 per cent 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 contracting.
The subsectors reporting growth are listed in the order of highest to lowest growth, while those reporting contraction are listed in the order of the highest to the lowest contraction.