October 7, 2024/CSL Research
The Central Bank of Nigeria (CBN) recently published its Purchasing Managers’ Index (PMI) survey for September 2024, covering three key sectors: Industry, Services, and Agriculture. The composite PMI for September stood at 50.5 points, marking the second consecutive month of economic expansion. This follows 13 months of contraction, which persisted until July 2024.
Typically, a PMI reading above 50.0 indicates growth in business activities, while a score below 50.0 signals a contraction. A reading of 50.0 suggests no change. The recent PMI data shows a gradual improvement: from 48.8 in June, to 49.7 in July, and 50.2 in August. This upward trend points to a slow but steady recovery in Nigeria’s economic activities.
In September, among the five key PMI indicators, three showed positive trends while two declined. Output level (50.7 points), new orders (52.2 points), and stock of raw materials (51.4points) all experienced expansion. However, suppliers’ delivery time shifted from stability in August to contraction in September.
The employment index also showed contraction at 49.1 points, though this is a slight improvement from 48.7 in both July and August, indicating gradual changes in hiring during the period. The growth in output levels for the third consecutive month suggests increased production, likely driven by stockpiling efforts and a rise in new orders.
The sectoral breakdown of the September PMI showed that the Services sector (51 points) expanded for the fourth consecutive month, while the Agricultural sector rose to 51.4 points, reflecting continued growth, primarily driven by crop production, livestock, and agricultural support services. In contrast, the Industry sector remained in contraction, with a PMI of 49.7 points, marking its eighth consecutive month of decline, with only one period of expansion in January over the past year. increase in output levels across most sectors, except Industry, highlights the significant impact of recent policies on the manufacturing sector.
Notably, the food, beverage, and tobacco subsector has seen a sustained contraction in orders. In 2024, record-high interest rates have driven up financing costs for many manufacturers, while inflation has eroded consumer purchasing power, leading to lower sales volumes and reduced output. Additionally, persistent currency devaluation has further weakened the import
capacity of the manufacturing sector.
Click here to read full PDF copy of report
