The Central Bank of Nigeria (CBN) has disclosed that the nation’s Purchasing Manufacturing Index (PMI) closed at 56.3 index points in February from 57.3 index points in January.
The apex bank latest PMI report means that the 56.3 index points indicated growth in the manufacturing sector for the 11th consecutive months.
The CBN uses Production Level, New Orders, Supplier Delivery Time, Employment Level and Raw material Inventories to measure PMI monthly.
Although, the PMI index grew at a slower rate, when compared to the closing figure in the previous and preceding months.
But according to the report, “Of the 15 subsectors surveyed, 10 reported growth in the review month in the following order: Plastics rubber products; textile, apparel, leather & footwear; appliances components; paper products; primary metal; petroleum & coal products; chemical & pharmaceutical products; food, beverage & tobacco products; electrical equipment and furniture & related products.
“The remaining 5 subsectors contracted in the following order: printing & related support activities; cement; nonmetallic mineral products; fabricated metal products; and transportation equipment,” the report explained.
On production, the report by CBN said, “At 57.8 points, the production level index for the manufacturing sector grew for the twelfth consecutive month in February 2018.
“The index indicated a slower growth in the current month, when compared to its level in the preceding month. Six of the 15 manufacturing subsectors recorded increase in production level, six remained unchanged, while the remaining three recorded declines in production level during the review month.
According to CBN, New Orders in February stood at 55.6 points, a growth in 11th consecutive month, indicating increase in new orders in February 2018.
On Supplier Delivery Time, the PMI report said, “The manufacturing supplier delivery time index stood at 57.0 points in February 2018, indicating faster supplier delivery time for the ninth consecutive month. Six subsectors recorded improved suppliers’ delivery time, 7 remained unchanged while 2 subsectors recorded delayed delivery time.
“The employment level index in February 2018 stood at 53.9 points, indicating growth in employment level for the tenth consecutive month. Of the 15 subsectors, 6 subsectors increased their employment level, 2 remained unchanged while 7 reduced their employment level in the review month.
“The Manufacturing sector inventories index grew for the eleventh consecutive month in February 2018.
“At 58.1 points, the index grew at a faster rate when compared to its level in the previous month. Nine of the 15 subsectors recorded growth, 5 remained unchanged while 1 recorded decline in raw material inventories.”
However, the figure reported in January was seen at 54.6 lower than 59.3 points recorded in December and 55.9 points in November.
FBNQuest in its January report, had said that the headline reading has been above 50 since March, 2017. The principal driver has been the CBN’s use of multiple fx windows, which has transformed liquidity.
Manufacturers, or indeed any users of fx, now have reliable access to fx provided that they are comfortable with the price. This is evident from the PMIs but also inflation data and listed company results.
“We have added “trigger” questions, which apply when the respondent has the same answer on a sub-index for two months and then changes it for the third. Two particularly interesting comments this time are references to the fuel scarcity and the non-payment of salaries.
“In the unweighted model of our choice (the ISM’s), respondents are asked whether output, employment, new orders, suppliers’ delivery times and stocks of purchases have improved on the previous month, are unchanged or have declined. A headline reading of 50 is neutral. We have posted nine negative readings since our launch in April 2013, the latest in January 2017,” it added.
Manufacturing expanded by 2.6 per cent q/q in Q3 2017. The two largest sub-sectors are food, beverages and tobacco, and textiles, apparel and footwear, which posted growth of 0.6% and 7.5 per cent respectively.