Thursday, December 24, 2020 /4:15
PM / By CBN / Header Image Credit: CBN
The December 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period December 7-11, 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). 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 December 2020 PMI
The Manufacturing PMI in the month of December stood at 49.6 index points, indicating a contraction from the expansionary level recorded in the month of November 2020 (Fig. 2 and Table 1). Of the 14 surveyed subsectors, 4 subsectors reported expansion (above 50% threshold) in the review month in the following order: Transportation equipment, Nonmetallic mineral products, Paper products and Food, beverage & tobacco products. Textile, apparel, leather & footwear subsector remained stationary while the remaining 9 subsectors reported contractions in the following order: Primary metal, Petroleum & coal products; Cement, Electrical equipment, Fabricated metal products, Printing & related support activities, Plastics & rubber products; Chemical & pharmaceutical products and Furniture & related products.
In December 2020, suppliers' delivery time was faster, new orders and production level increased while employment level and raw materials inventories contracted.
The December 2020 production level index for the manufacturing sector stood at 51.6 points, indicating expansion for two consecutive months. Of the 14 subsectors surveyed, 6 subsectors recorded increased production level, 4 subsectors reported stationary level of production, while 4 subsectors recorded declines in production in December 2020 (Fig. 3 and Table 2).
The new orders expanded for the third consecutive months in the month of December. The index stood at 50.2 points in December 2020. Five subsectors reported expansion in new orders, 2 subsectors remained stationary while the remaining 7 recorded contraction in the review month (Fig. 4 and Table 3).
Supplier Delivery Time
The manufacturing supplier delivery time index stood at 51.2 points in December 2020, this indicates that supplier delivery time was faster for the eighth consecutive months. Eight of the 14 subsectors recorded improved suppliers' delivery time, 3 subsectors remained stationary, while 3 subsectors recorded slower delivery time (Fig. 5 and Table 4).
The employment level index for December 2020 stood at 46.3 points, indicating contraction in employment level for the ninth consecutive months. Of the 14 subsectors, only transportation equipment subsector recorded growth in employment level. Four subsectors recorded stationary employment level while the remaining nine subsectors recorded lower employment level in the review month (Fig. 6 and Table 5).
Raw material Inventories
The manufacturing sector inventories index contracted for the ninth consecutive months in December 2020. At 46.9 points, the index declined in the review month. Four of the 14 subsectors recorded growth in inventories, 2 subsectors remained stationary while the remaining 8 subsectors recorded lower raw material inventories in the review month (Fig. 7 and Table 6).