June 1, 2020/CBN

Introduction

The May 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period May 14-19, 2020. The respondents were purchasing and supply executives of manufacturing and non-manufacturing organizations in all 36 states in Nigeria and the Federal Capital Territory (FCT). The Bank makes no representation regarding the individual companies, other than the information they have provided. The data contained herein further provides input for policy decisions.

Data and Method of Presentation

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the current month compared with the preceding month. For each of the indicators measured, this report shows the diffusion index of the responses. The diffusion index is computed as the percentage of responses with positive change plus half of the percentage of those reporting no change, except for supplier delivery time, which is computed as the percentage of responses with negative change plus half of the percentage of those reporting no change. The composite PMI for the manufacturing sector is computed as the weighted average of five diffusion indices, namely: production level, level of new orders, suppliers’ delivery time, employment level and raw materials inventory/work in progress, with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively. The composite PMI for the non-manufacturing sector is computed from four diffusion indices, namely: business activity, level of new orders, employment level and raw materials inventory, with equal weights of 25% each. 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 subsectors reporting growth are listed in the order of highest to lowest growth, while that reporting contraction are listed in the order of the highest to the lowest contraction.

Manufacturing May 2020 PMI

The Manufacturing PMI in the month of May stood at 42.4 index points, indicating contraction in the manufacturing sector for the first time after recording expansion for thirty-six consecutive months (Fig. 2 and Table 1). Of the 14 surveyed subsectors, only the electrical equipment sector reported growth (above 50% 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.

In May 2020, supplier delivery time grew, while Production level, new orders, employment level and raw materials inventories declined.

Production Level

At 44.5 points, the production level index for the manufacturing sector declined in May 2020 after thirty seven consecutive months of recorded growth. One subsector recorded increased production level, 4 remained unchanged, while nine subsectors recorded declines in production in May 2020 (Fig. 3 and Table 2).

New Orders

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 (Fig. 4 and Table 3).

Supplier Delivery Time

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, 4 subsectors reported no change while 5 recorded slower delivery time in March 2020 (Fig. 5 and Table 4).

Employment Level

The employment level index for May 2020 stood at 24.5 points, indicating 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 (Fig. 6 and Table 5).

Raw material Inventories

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 (Fig. 7 and Table 6).

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