… Hits 50.2 in August – CBN
Nigeria’s economic activity showed signs of recovery as the composite Purchasing Managers’ Index (PMI) for August 2024 stood at 50.2 index points, from 49.7 index in July, indicating expansion for the first time after 13 consecutive months of contraction.
This was disclosed in the PMI survey report released on Wednesday by the Central Bank of Nigeria (CBN) on its website.
The expansion was primarily driven by the services and agricultural sectors. The services sector recorded its third consecutive month of growth, while the agricultural sector expanded for the first time in over a year. Although the industry sector continued to contract, the rate of contraction slowed compared to the previous month.
Out of 36 sub-sectors analysed across industry, services, and agriculture, 17 reported growth. The primary metal subsector led the way with the highest growth, while 19 sub-sectors experienced a decline, with forestry reporting the sharpest drop.
Key indicators such as output, new orders, and stock of raw materials also showed positive movements, recording index points of 50.8, 50.5, and 51.3, respectively. However, employment figures remained a concern, registering a decline at 48.7 points, while suppliers’ delivery time remained unchanged at 50.0 points.
The August PMI data signals a potential turnaround in Nigeria’s economic trajectory, raising hopes for sustained recovery after a prolonged period of contraction.
The August 2024 PMI survey was conducted from August 12-16, 2024, to gauge the direction of economic activities in Nigeria for the month. The survey respondents were the company’s purchasing and supply executives, drawn from the three sectors of the economy, namely: industry, services, and agriculture.
The PMI is computed based on responses regarding the direction of change in different aspects of respondents’ business activities. An index above 50.0 points indicates an expansion in business activities, while below 50.0 points indicates a contraction in business activities. An index of 50.0 indicates a no-change situation.
According to the report, the composite output index stood at 50.8 points in August 2024, indicating growth in production level for the second consecutive month. Of the 36 sub-sectors reviewed, 19 subsectors reported growth in production during the review month, with primary metal recording the highest expansion, while 14 subsectors registered a decline with non-metallic mineral products reporting the highest decline. The fabricated metal products, which include electricity, gas, steam and air conditioning supply; and utilities sub-sectors remained stationary.
In the month under review, the composite level of new orders index at 50.5 points indicated expansion in the volume of incoming businesses/orders. Of the 36 sub-sectors reviewed, 15 sub-sectors reported growth in Levels of new orders with primary metals recording the highest growth.
Plastics and rubber products and transportation equipment subsectors were stationary, while the remaining 19 sub-sectors reported lower levels of new orders in the review month.
The industry Sector PMI stood at 49.2 points, marking the seventh consecutive month of contraction. However, this figure represents an improvement from the contractionary position observed since March 2024.
This suggests that while the sector continues to experience contraction, there has been a gradual recovery in industrial activities over the past few months. Analysis of the subsector shows that mining, quarrying, electricity, gas, and water supply; and construction subsectors registered expansions, while the manufacturing subsector declined in August 2024.
Among the 17 subsectors surveyed, nine recorded contractions, while the remaining eight indicated expansion. The subsector with the highest contraction was transportation equipment, whereas primary metal recorded the highest expansion.
