Nigeria’s Manufacturing Purchasing Managers’ Index (PMI) has taken a downward slope, as the Nigerian economy continues to take a hit from the effects of the Covid-19 pandemic.
According to the latest Purchasing Manager’s Index (PMI) report released by the Central Bank of Nigeria (CBN), the manufacturing sector went south and took a downward slope in the month of July 2020.
The Manufacturing PMI in the month of July stood at 44.9 index points, indicating a contraction in the manufacturing sector for the third month in a row. The report has it that there was a marginal growth compared to 41.1 and 42.4 index points recorded in June and May 2020 respectively.
As the COVID-19 pandemic continues to disrupt both supply and demand chains of production, there is every possibility of a further decline in the PMI of subsequent months.
Industries That Stood Above The 50% Threshold
According to the report, on the surveyed subsectors, the only sub-sector that recorded above a 50% threshold was the transportation industry. Obviously, this is due to the gradual easing of lockdown across the country and the movement across board.
However, the remaining subsectors took an economic downturn in the following order: printing & related support activities; primary metals; fabricated metal products; paper products; food, beverage & tobacco products; chemical & pharmaceutical products; furniture & related products; electrical equipment; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear, and cement.
Excluding, a few other surveyed subsectors, like arts, entertainment & recreation, and warehousing, which recorded growth above the 50% threshold.
What You Need To Know About PMI
The Purchasing Managers’ Index (PMI) in Nigeria is a survey conducted by the apex Bank – CBN. It shows the changes in the level of business activities in the current month compared with the preceding month. The report helps entrepreneurs better understand their industries.
Furthermore, this index shows the direction of economic trends in the manufacturing and service sectors. So, the purpose of the PMI is to provide information about current and future business conditions to company decision-makers, analysts, and investors.
According to the latest PMI figures, it is obvious that Nigeria’s manufacturing and the non-manufacturing sectors are yet to recover from the effects of COVID-19 lockdown.
The value and movements in the PMI and its components can provide useful insight to entrepreneurs; principal individuals like decision-makers, market analysts, and investors. And it’s a leading indicator of overall economic activity in Nigeria.
As a Nigerian entrepreneur, what is your take on this latest PMI report? We will like to hear your thoughts in the comments.
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