Only six subsectors of the 14 subsectors surveyed in Nigeria’s manufacturing sector showed expansion in the month of August, according to the PMI report released by the Central Bank for August.
The expanding subsectors include non-metallic mineral products; cement; plastics & rubber products; transportation equipment; chemical & pharmaceutical products and textile, apparel, leather and footwear.
Nigeria’s manufacturing Purchasing Managers’ Index (PMI) contracted by 48.5 index points in the month of August, indicative of a four consecutive months contraction.
Nonetheless, manufacturing supply delivery time remained faster in August at 53.0 points while production level, new orders, employment level and raw materials inventory continued to contract.
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The first contraction was reported in May 2020 at 42.4 index points and the months after, June and July also recorded contractions of 41.1 and 44.9 indices points respectively.
Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing point of view and therefore uses their responses to set questions on core variables in their businesses.
A PMI above 50 points shows that the manufacturing/non-manufacturing economy is generally expanding, 50 points depicts no change and below 50 points indicates that it is generally contracting.
The contraction the manufacturing sector has seen since May 2020 is closely tied to the effects of the restrictions on economic activities in a bid to curb the coronavirus pandemic.
The August manufacturing PMI of 48.5 index points is, however, an improvement from the 44.9 index points recorded in July as there has been a gradual normalisation of the economy as lockdown is being eased and the economy is opening up.
