Nigeria’s Purchasing Managers’ Index (PMI) stood at 41.1 in June 2020, which reflects a contraction in the manufacturing sector for the second time.
The PMI report which was published by the Central Bank of Nigeria showed that of the 14 surveyed sub-sectors, five sub-sectors reported growth (above 50% threshold) in the review month in the following order: electrical equipment; cement; petroleum and coal products; transportation equipment; and paper products.
In June 2020, the production level index for the manufacturing sector declined at 36.6 points for the second consecutive month. According to the report, three sub-sectors recorded an increased production level, while two remained unchanged.
However, there was a decline in the remaining 9 sub-sectors. The 9 sub-sectors which were in decline were 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.
Also, the supplier delivery time experienced growth, while production level, new orders, employment level, and raw materials inventories declined, in June 2020. According to the report, the manufacturing supplier delivery time index stood at 60.9 points in June 2020. This is a true indication that there is growth in the supplier delivery time index for the second time.
Also, the employment level index in June 2020 stood at 38.8 points, indicating decline in employment level index for the third month. This is against the backdrop of the fact that of the 14 sub-sectors, two sub-sectors recorded increases in employment, one sub-sector remained unchanged, while the remaining 11 sub-sectors recorded lower employment level in the review month.
What To Know About PMI
The Purchasing Managers’ Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding, staying the same, or contracting. The purpose of the PMI is to provide information about current and future business conditions to company decision-makers, analysts, and investors.
The Manufacturing and Non-Manufacturing PMI Report on businesses are based on survey responses. It indicates the changes in the level of business activities in the current month compared with the preceding month.
The Purchasing Managers Index (PMI) is a measure of the prevailing direction of economic trends in manufacturing.
The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity.
The value and movements in the PMI and its components can provide useful insight to business decision-makers, market analysts, and investors, and is a leading indicator of overall economic activity in Nigeria.