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Manufacturing PMI slows to 51.1pts in March 2020, lowest in over a year

Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, slowed in March to its lowest in over a year, according to data by the Central Bank of Nigeria (CBN). The central bank on Tuesday warned that muted outlook outbreak for the first half of the year following the coronavirus may dampen overall growth prospects for 2020.

The Manufacturing PMI in the month of February stood at 51.1 index points, indicating expansion in the manufacturing sector for the thirty-sixth consecutive month, the apex bank said. “The index grew at a slower rate when compared to the index in February.”

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Manufacturing PMI stood at 58.3 points in February 2020. Meanwhile Non-manufacturing PMI fell to 49.2 points in March from 58.6 points in Februray.

The index is based upon manufacturers’ responses to set questions on core variables in their businesses. A 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.

Responses on 7 out of 14 sub-indices (transportation equipment; petroleum & coal products; furniture & related products; food, beverage & tobacco products; cement; fabricated metal products and plastics & rubber products) showed growth in those sectors above CBN’s 50 points minimum threshold.

However, electrical equipment; primary metal; nonmetallic mineral products; paper products; textile, apparel, leather and footwear; printing & related support activities and chemical & pharmaceutical products subsectors, all recorded declines in the review month, the apex bank said.

The production level index and New Orders slowed down while Supplier Delivery, Time Employment levels and Raw material Inventories recorded their first declines in more than 20 months.

The outbreak of the COVID-19 has affected manufacturing as critical supply chains from abroad, especially China have been disrupted. The CBN recently announced a N1.1trn credit support or manufacturing and healthcare businesses to cushion the economic effect of the SARs-like disease. However with 46 cases already, Nigeria may soon announce a lockdown which would trigger negative demand and supply shocks to the economy.

SEGUN ADAMS

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