The Central Bank of Nigeria (CBN) said that the Manufacturing Purchasing Managers Index, (PMI) dropped to 42.4 index points in May, indicating contraction in the manufacturing sector for the first time after recording expansion for 36th consecutive months.
According to the CBN PMI survey, “Of the 14 surveyed subsectors, only the electrical equipment sector reported growth (above 50per cent threshold) in the review month, while the remaining 13 subsectors reported declines in the following order cement; petroleum & coal products; printing & related support activities; furniture & related products; textile, apparel, leather and footwear; paper products; fabricated metal products; food, beverage & tobacco products; chemical & pharmaceutical products; transportation equipment; plastics & rubber products; nonmetallic mineral products; appliances and components and primary metal.”
The apex bank uses production level, new orders, supplier delivery time, employment level and raw material Inventories to conducts its PMI survey.
On production level, the report said, “At 44.5 points, the production level index for the manufacturing sector declined in May 2020 after 37 consecutive months of recorded growth. One subsector recorded an increased production level, four remained unchanged, while nine subsectors recorded declines in production in May 2020.”
The survey on new orders index stated that, “At 42.8 points, the new orders index declined after thirty-sixth consecutive months of growth, indicating declines in new orders in May 2020. Three subsectors reported growth, 2 remained unchanged while 9 recorded declines in the review month.”
“The manufacturing supplier delivery time index stood at 65.2 points in May 2020, indicating growth in supplier delivery time. The index recorded growth from the contraction level of March 2020.
“Five of the 14 subsectors recorded improved suppliers’ delivery time, four subsectors reported no change while 5 recorded slower delivery time in March 2020,” the report explained on supplier delivery time index.
Also, the employment level index for May 2020 stood at 24.5 points, indicating a decline in employment level for the second month. Of the 14 subsectors, one subsector remains unchanged, while the remaining 13 subsectors recorded lower employment level in the review month
In addition, the report on raw material Inventories stated that the manufacturing sector inventories index contracted for the second time in May 2020.
“At 37.4 points, the index further dipped when compared to its level in March 2020. All the 14 subsectors recorded reported lower raw material inventories in the review month,” the PMI survey disclosed.