September 24, 2020/CBN

Introduction

The September 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period August 10-14, 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 September 2020 PMI

The Manufacturing PMI in the month of September stood at 46.9 index points, indicating contraction in the manufacturing sector for the fifth time (Fig. 2 and Table 1). Of the 14 subsectors surveyed, 4 subsectors reported expansion (above 50% threshold) in the review month in the following order: electrical equipment; transportation equipment; cement and nonmetallic mineral products. The remaining subsectors reported contractions in the following order: petroleum & coal products; primary metal; furniture & related products; printing & related support activities; food, beverage & tobacco products; textile, apparel, leather & footwear; chemical & pharmaceutical products; fabricated metal products and plastics & rubber products; while paper product subsector was stable.

In September 2020, supplier delivery time grew faster, while Production level, new orders, employment level and raw materials inventories contracted.

Production Level

At 47.3 points, the production level index for the manufacturing sector indicated contraction in September 2020 for the fifth consecutive month. Of the 14 subsectors surveyed, 5 subsectors recorded increased production level, 1 subsector reported same level of production, while 8 subsectors recorded declines in production in September 2020 (Fig. 3 and Table 2).

New Orders

At 46.4 points, the new orders index contracted in September 2020 for the fifth consecutive month. Six subsectors reported expansion in new orders, while the remaining 8 recorded contraction in the review month (Fig. 4 and Table 3).

Supplier Delivery Time

The manufacturing supplier delivery time index stood at 53.5 points in September 2020, indicating faster supplier delivery time for the fifth time. Six of the 14 subsectors recorded improved suppliers’ delivery time, 5 subsectors reported same level, while 3 subsectors recorded slower delivery time (Fig. 5 and Table 4).

Employment Level

The employment level index for September 2020 stood at 44.1 points, indicating contraction in employment level for the sixth consecutive month. Of the 14 subsectors, 2 subsectors recorded growth in employment, 3 subsectors recorded same level of employment, while the remaining 9 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 sixth consecutive time. At 43.0 points, the index declined in the review month. Four of the 14 subsectors recorded growth in inventories, while the remaining 10 subsectors recorded lower raw material inventories in the review month (Fig. 7 and Table 6).

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