| CBN Circulars & Publications |    1288 VIEWS  |
| CBN Circulars & Publications | |
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| PROSHARE | |
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Wednesday, July 29, 2020 / 5:24 PM / By CBN / Header Image Credit: CBN
Introduction
The June 2020 PMI survey
was conducted by the Statistics Department of the Central Bank of Nigeria
during the period June 8-12, 2020. The respondents were purchasing and supply
executives of manufacturing and non-manufacturing companies in the 36 states in
Nigeria and the Federal Capital Territory (FCT). The Bank makes no
representation regarding the individual companies, other than the information
they have provided. The data contained herein further provides input for policy
decisions.
Data and Method of Presentation
The
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. For each of the indicators
measured, this report shows the diffusion index of the responses. The diffusion
index is computed as the percentage of responses with positive change plus half
of the percentage of those reporting no change, except for supplier delivery
time, which is computed as the percentage of responses with negative change
plus half of the percentage of those reporting no change. The composite PMI for
the manufacturing sector is computed as the weighted average of five diffusion
indices, namely: production level, level of new orders, suppliers' delivery
time, employment level and raw materials inventory/work in progress, with
assigned weights of 25%, 30%, 15%, 10% and 20%, respectively. The composite PMI
for the non-manufacturing sector is computed from four diffusion indices,
namely: business activity, level of new orders, employment level and raw
materials inventory, with equal weights of 25% each. 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. The subsectors reporting growth are listed in the
order of highest to lowest growth, while that reporting contraction are listed
in the order of the highest to the lowest contraction.
Manufacturing May 2020 PMI
The Manufacturing PMI in
the month of July stood at 44.9 index points, indicating contraction in the
manufacturing sector for the third consecutive month (Fig. 2 and Table 1). Of
the 14 surveyed subsectors, transportation equipment subsector reported growth
(above 50% threshold) in the review month while nonmetallic mineral products
sector reported no change. However, the remaining 12 subsectors reported
contraction 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.
In July 2020, supplier
delivery time was faster, while Production level, new orders, employment level
and raw materials inventories contracted.
Production
Level
At 44.7 points, the
production level index for the manufacturing sector declined in July 2020 for
the third consecutive month. One subsector recorded increased production level,
four remained unchanged, while nine subsectors recorded declines in production
in July 2020 (Fig. 3 and Table 2).
New
Orders
At 43.1 points, the new
orders index show contraction for the third consecutive month in new orders
index in July 2020. It however grew by 6.7 points above the level recorded in
June 2020. Two subsectors reported expansion, 3 remained unchanged while 9
subsectors recorded contraction in the review month (Fig. 4 and Table 3).
Supplier
Delivery Time
The manufacturing supplier
delivery time index stood at 56.4 points in July 2020, indicating faster
supplier delivery time for the third consecutive month. Ten of the 14
subsectors recorded improved suppliers' delivery time, 2 subsectors reported no
change while the remaining 2 recorded slower delivery time in July 2020 (Fig. 5
and Table 4).
Employment
Level
The employment level index
for July 2020 stood at 40.0 points, indicating decline in employment level for
the fourth consecutive month. Of the 14 subsectors, 3 subsectors remain
unchanged, while the remaining 11 subsectors recorded lower employment level in
the review month (Fig. 6 and Table 5).
Raw
material Inventories
At 43.2 points, the
manufacturing sector inventories index contracted for the fourth consecutive
month in July 2020. Three of the 14 subsectors recorded growth in inventories,
2 remained unchanged, while the remaining 9 subsectors recorded lower raw
material inventories in the review month (Fig. 7 and Table 6)
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