Purchasing Managers Index (PMI) for the Nigerian manufacturing sector has shown a strong rebound from 48.8 percent in November to 50.0 percent in December; an appreciable growth rate of 3.2 percent in one month, data from the Central Bank of Nigeria (CBN) has shown.
The index update is a familiar data release at the start of the calendar month in developed markets (such as the ISM in the US), the larger emerging markets such as China and a few other frontiers. It is based upon the responses of manufacturers to set questions on core variables in their businesses.
However, the apex bank said that the manufacturing sector expanded in December for the first time in 11 months, signaling a recovery from the economic which prevailed in 2016.
The index had recorded decline in the preceding 11 months. CBN Governor, Mr. Godwin Emefiele, said, “Eight of the sixteen sub-sectors surveyed recorded expansion in the review month in the following order: cement, food, beverage and tobacco products; textile, apparel, leather, and footwear; plastics and rubber products; paper products; appliances and components; chemical and pharmaceutical products; and furniture and related products.
Production level index “The fabricated metal products sub-sector remained unchanged, while the remaining seven subsectors declined in the order: computer and electronic products; electrical equipment; primary metal; transportation equipment; petroleum and coal products; printing and related support activities; and non-metallic mineral products.
“At 57.6 index points, the production level index for manufacturing sector indicated the sector expanded in the review period, compared to the decline recorded in the preceding eleven months. At 51.8 points, the new orders index showed expansion in new orders after eleven months of contraction. It stood at 45.1 in November 2016.
“At 47.9 index points, the supplier delivery time for manufacturing sub-sectors contracted in the month of December 2016, after nine consecutive periods of expansion.
Employment level index in the month of December 2016 stood at 48.6 points, indicating declines in employment level for the twenty-second consecutive month.
However, the index shows a slowing contraction in manufacturing employment when compared with the level in the preceding month.
“At 51.6 index points, the index shows an expansion in raw materials inventory in the review month, after declining for eleven consecutive months.”
The report also revealed a slowing of the decline in the non-manufacturing sector in during the month. It stated that: “Business activity, new orders, employment level and raw materials inventories in the non-manufacturing sector declined at a slower rate in December 2016.
“The composite PMI for the non-manufacturing sector declined for the twelfth consecutive month. The index stood at 47.1 points, indicating a slowing contraction when compared to that in November 2016. Of the eighteen non-manufacturing sub-sectors, ten recorded contraction in the following order: construction; public administration; professional, scientific and technical services; information and communication; repair, maintenance/washing of motor vehicles; accommodation and food services; health care and social assistance; finance and insurance; wholesale/retail trade; and electricity, gas, steam and air conditioning supply.
”The remaining eight subsectors recorded expansion in the order: utilities; educational services; agriculture; transportation and warehousing; management of companies; arts, entertainment, and recreation; water supply, sewage and waste management; and real estate, rental and leasing.