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Manufacturing PMI Rises To 49.4 In October As Unemployment Worsens

Nigeria’s Manufacturing PMI in the month of October stood at 49.4 index points, indicating slowing contraction in the manufacturing sector compared with the last five months, the Central Bank of Nigeria (CBN) has reported.

Similarly, the apex bank’s October 2020 Purchasing Manager’s Index Survey reflected that the PMI for the non-manufacturing sector stood at 46.8 points, indicating contraction in Nonmanufacturing PMI for the seventh consecutive month

However, despite the contraction in Manufacturing PMI, the production level index rose marginally in the month under review to 50.0%, halting the contraction trend which started in May 2020.

According to the latest CBN’s PMI report, of the 14 subsectors surveyed, 6 subsectors reported expansion (above 50% threshold) in the review month in the following order: Electrical equipment, Transportation equipment, Printing & related support activities, Chemical & pharmaceutical products, Textile, apparel, leather & footwear and Cement.

Also, the remaining 8 subsectors reported contractions in the following order: Primary metal, Petroleum & coal products, Paper products, Fabricated metal products, Furniture & related products, Nonmetallic mineral products, Plastics & rubber products and Food, beverage & tobacco products.

On the production level index, the apex bank report indicated that of the 14 subsectors surveyed, 7 subsectors recorded expansion in production level, 1 subsector maintained current level, while 6 subsectors recorded declines in production in October 2020

A further analysis of the PMI Survey showed that the new orders index expanded at 51.2 points from contraction in the previous month, with four subsectors reported expansion in new orders, 4 subsectors stationary, while the remaining 6 recorded contractions in the review month.

This is even as the manufacturing supplier delivery time index stood at 51.8 points in October 2020, indicating that supplier delivery time is faster for the sixth consecutive month. Six of the 14 subsectors recorded improved suppliers’ delivery time, 5 subsectors reported stationery level, while 3 subsectors recorded slowing delivery time

According to the survey result, the employment level index for October 2020 stood at 46.0 points, indicating contraction in employment level for the seventh consecutive month.

The PMI Survey further reflected that of the 14 subsectors, 3 subsectors recorded growth in employment level in the review month; 2 subsectors recorded stationary level of employment, while the remaining 9 subsectors recorded lower employment levels in the review month.

With the raw material inventories standing at 46.2 index points, the report showed that the manufacturing sector inventories contracted for the seventh time in October, with just two of the 14 subsectors recording growth in inventories, while the remaining 12 subsectors recorded lower raw material inventories in the review month

On the PMI for the non-manufacturing sector, the survey indicated that of the 17 sub-sectors surveyed, 3 subsectors reported growth in the following order: Electricity, gas, steam & air conditioning supply; Art, entertainment & recreation and Health care & social assistance.

However, 11 subsectors reported declined in the following order: Management of companies; Utilities; Information & communication; Construction; Professional, scientific, & technical services; Repair, Maintenance/Washing of Motor Vehicles; Wholesale/Retail trade; Educational services; Transportation & warehousing; Accommodation & food services and Real estate rental & leasing.

Three subsectors, namely Agriculture; Finance & Insurance and Water Supply, Sewage & Waste Management were stationary during the month in review.

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