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Manufacturing PMI Stands at 58.5% in January 2019 from 61.1% in December 2018

CBN Circulars & Publications	4128 VIEWS
CBN Circulars & Publications
4128 VIEWS

Thursday, January 31, 2019 / 06:50 PM / CBN

Introduction

The January 2019 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period January 14-18, 2019. 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). 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 subsectorsreporting growth are listed in the order of highest to lowest growth, while those reporting contraction are listed in the order of the highest to the lowest contraction.

Manufacturing PMI Report

The Manufacturing PMI in the month of January stood at 58.5 index points, indicating expansion in the manufacturing sector for the twentysecond consecutive month (Fig. 2 and Table 1). The index grew at a slower rate when compared to the index in the previous month. All 14 subsectors surveyed reported growth in the review month in the following order: petroleum & coal products; chemical & pharmaceutical products; primary metal; paper products; cement; furniture & related products; printing & related support activities; fabricated metal products; electrical equipment; food, beverage & tobacco products; nonmetallic mineral products; textile, apparel, leather & footwear; plastics & rubber products; and transportation equipment.

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Production Level

At 59.3 points, the production level index for the manufacturing sector grew for the twenty-third consecutive month in January 2019. The index indicated a slower growth in the current month, when compared to its level in the preceding month. Twelve of the 14 manufacturing subsectors recorded increased production level, while 2 remained unchanged (Fig. 3 and Table 2).

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New Orders

At 58.9 points, the new orders index grew for the twenty-second consecutive month, indicating increase in new orders in January 2019. Eleven subsectors reported growth, 2 remained unchanged, while 1 contracted in the review month (Fig. 4 and Table 3).

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Supplier Delivery Time

The manufacturing supplier delivery time index stood at 58.3 points in January 2019, indicating slower supplier delivery time. The index has recorded growth for twenty consecutive months. Eleven subsectors recorded improved suppliers’ delivery time, while 3 remained unchanged (Fig. 5 and Table 4).

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