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Growth in production level drives manufacturing PMI expansion in October

manufacturing

The Purchasing Managers Index (PMI) of the manufacturing sector expanded faster to 58.2 points in October from 57.7 points in September, driven by the production level which grew by 59.3 index points this month.

Similarly, composite PMI for the non-manufacturing sector stood at 58.2 points in October 2019, indicating expansion in the non-manufacturing PMI for the 30th consecutive month. The index grew at a faster rate when compared to its level of 58.0 points in September 2019.

The Central Bank of Nigeria (CBN) on Friday released the PMI for the month of October, which revealed that production level, new orders, supplier delivery time, employment level and raw materials inventories grew at a faster rate in October 2019.

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 sub-sectors 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.

The manufacturing PMI report showed expansion in the manufacturing sector for the 31st consecutive month. Thirteen of the 14 surveyed sub-sectors reported growth in the review month. These include petroleum and coal products; cement; electrical equipment; furniture and related products; fabricated metal products; printing and related support activities; textile, apparel, leather and footwear; food, beverage and tobacco products; non-metallic mineral products; plastics and rubber products; primary metal; chemical and pharmaceutical products; and transportation equipment. The paper products sub-sector recorded decline in the review period.

At 59.3 points, the production level index for manufacturing sector grew for the 32nd consecutive month in October 2019. The index indicated a faster growth in the current month, when compared to its level in September 2019.

Eleven of the 14 manufacturing subsectors recorded increased production level, while three recorded decline. The new orders index grew for the 31st consecutive month to 57.9 points, indicating increase in new orders in October 2019. The index grew at a faster rate when compared to its level of 57.2 points in September 2019. Nine subsectors reported growth, two remained unchanged, while three contracted in the review month.

The non-manufacturing inventory index at 59.2 points grew for the 30th consecutive month, indicating growth in inventories in the review period. Of the 17 subsectors surveyed, 15 recorded higher inventories, one remained unchanged, while one recorded declining inventories in October 2019.

HOPE MOSES-ASHIKE