June 25, 2020/CBN

Introduction

The June 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period June 8-12, 2020. The respondents were purchasing and supply executives of manufacturing and non-manufacturing companies in the 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 June 2020 stood at 41.1, indicating contraction in the manufacturing sector for the second time. (Fig. 2 and Table 1). Of the 14 surveyed subsectors, 5 subsectors reported growth (above 50% threshold) in the review month in the following order: electrical equipment; cement; petroleum & coal products; transportation equipment and paper products. However, the remaining 9 subsectors reported declines in the following order printing & related support activities; textile, apparel, leather & footwear; primary metal; plastics & rubber products; nonmetallic mineral products; fabricated metal products; food, beverage & tobacco products; chemical & pharmaceutical products and furniture & related products.

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

Production Level

At 36.6 points, the production level index for the manufacturing sector declined in June 2020 for the second consecutive month. Three subsectors recorded increased production level, 2 remained unchanged, while 9 subsectors recorded declines in production level in June 2020 (Fig. 3 and Table 2).

New Orders

At 36.4 points, the new orders index further declined from the level recorded in May 2020, indicating declines in new orders in June 2020. Five subsectors reported growth, while 9 recorded declines in the review month (Fig. 4 and Table 3).

Supplier Delivery Time

The manufacturing supplier delivery time index stood at 60.9 points in June 2020, indicating growth in supplier delivery time index for the second time. The index recorded growth from the contraction level recorded in March 2020. Nine of the 14 subsectors recorded improved suppliers’ delivery time, 3 subsectors reported no change while 2 recorded slower delivery time in June 2020 (Fig. 5 and Table 4).

Employment Level

The employment level index in June 2020 stood at 38.8 points, indicating decline in employment level index for the third month. Of the 14 subsectors, 2 subsectors recorded increases in employment, one subsector remained unchanged, while the remaining 11 subsectors recorded lower employment level in the review month (Fig. 6 and Table 5).

Raw material Inventories

The manufacturing sector inventories index showed contraction for the third time in June 2020. At 41.0 points, the raw materials inventories index is contracting at a slower rate when compared to its level in May 2020. Three of the 14 subsectors recorded reported growth in inventories, 1 remained unchanged, while the remaining 10 subsectors recorded lower raw material inventories in the review month (Fig. 7 and Table 6).

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