CBN PMI report shows economic contraction in October
The Central Bank of Nigeria (CBN) has revealed that only nine business categories out of the 31 surveyed by for its monthly Purchasing Managers Index (PMI) report for this month (October) recorded expansion in activities in this month.
This also means the remaining 22 business activities recorded contraction.
The CBN in its PMI report for October 2020 said that six of the business categories that recorded expansion are in the Manufacturing Sector while the remaining three are in the Non-Manufacturing sector.
The Nine Business Categories that recorded expansion in their activities during the month according to the CBN are:
- Electrical equipment,
- Transportation equipment,
- Printing & related support activities
- Chemical & pharmaceutical products,
- Textile, apparel, leather & footwear
NON- MANUFACTURING SCTOR
- Electricity, gas, steam & air conditioning supply;
- Art, entertainment & recreation
- Health care & social assistance
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ABOUT THE CBN PMI report
According to the CBN, 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.
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.
OCTOBER 2020 PMI REPORT
The CBN further explained that “The October 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period October 12-16, 2020.
“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).”
Manufacturing October 2020 PMI
The CBN further stated that the Manufacturing PMI in the month of October stood at 49.4 index points, indicating slowing contraction in the manufacturing sector 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.
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.
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.
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
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.
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
Non-Manufacturing PMI Report
PMI for the non-manufacturing sector stood at 46.8 points in October 2020, indicating contraction in Nonmanufacturing PMI for the seventh consecutive month. Of the 17 sub-sectors surveyed, 3 subsectors reported growth.
At 48.7 points, the business activity index declined for the sixth consecutive month, indicating contraction in non-manufacturing business activity in October 2020. Three out of the 17 subsectors reported growth in business activities (above 50% threshold) in the review month; while 11 subsectors recorded decline in business activity and 3 subsectors were stationary in October 2020.
At 47.8 points, new orders index declined for the seventh time in October 2020. Six of the 17 subsectors reported growth in new order (above 50% threshold) in the review month, 1 sector reported stationary level, while the remaining 10 subsectors recorded decline in new orders in the review month,
The employment level Index for the non-manufacturing sector stood at 44.2 points, indicating contraction in employment level in October 2020. All 17 subsectors reported decline in employment level (below 50% threshold) in the review month