October 28, 2020/CBN

Introduction

The October 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period April 9-13, 2019. 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 those reporting contraction are listed in the order of the highest to the lowest contraction.

Manufacturing PMI Report

The Manufacturing PMI in the month of October stood at 49.4 index points, indicating slowing contraction compared with the last five months (Fig. 2 and Table 1). 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. 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.

In October 2020, suppliers’ delivery time was faster, new orders increased, while employment level and raw materials inventories contracted.

Production Level

At 50.0 points, the production level index in October 2020 for the manufacturing sector indicating halting in contraction which commenced since May 2020. 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 (Fig. 3 and Table 2).

New Orders

The new orders index expanded at 51.2 points from contraction in the previous month. Four subsectors reported expansion in new orders, 4 subsectors were stationary, while the remaining 6 recorded contractions in the review month (Fig. 4 and Table 3).

Supplier Delivery Time

The manufacturing supplier delivery time index stood at 51.8 points in October 2020. This indicates 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 (Fig. 5 and Table 4).

Employment Level

The employment level index for October 2020 stood at 46.0 points, indicating contraction in employment level for the seventh consecutive month. 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 (Fig. 6 and Table 5).

Raw Material Inventories

At 46.2 index points, the manufacturing sector inventories contracted for the seventh time in October 2020. Two of the 14 subsectors recorded growth in inventories, while the remaining 12 subsectors recorded lower raw material inventories in the review month (Fig. 7 and Table 6).

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