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Manufacturing PMI Stands at 56.2% in September 2018 from 57.1% in August 2018

CBN Circulars & Publications	4034 VIEWS
CBN Circulars & Publications
4034 VIEWS

Wednesday, October 03, 2018 / 11:03 AM / CBN

Introduction

The September 2018 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period September 10-17, 2018. 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) (Fig. 1).

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

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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 those reporting contraction are listed in the order of the highest to the lowest contraction.

Manufacturing PMI Report

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The Manufacturing PMI in the month of September stood at 56.2 index points, indicating expansion in the manufacturing sector for the eighteenth consecutive month. (Fig. 3 and Table 1).

The index however grew at a slower rate when compared to the index in the previous month. Of the 14 subsectors surveyed, 10 reported growth in the review month in the following order: Electrical equipment; Printing & related support activities; Transportation equipment; Nonmetallic mineral products; Chemical & pharmaceutical products; Fabricated metal products; Furniture & related products; Textile, apparel, leather & footwear; Food, beverage & tobacco products; and Plastics & rubber products.

The Petroleum & coal products; Cement; Paper products; and Primary metal subsectors declined in the review month.

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Production Level

At 58.4 points, the production level index for the manufacturing sector grew for the nineteenth consecutive month in September 2018. The index indicated a slower growth in the current month, when compared to its level in the preceding month. Ten of the 14 manufacturing subsectors recorded increase in production level, 1 remained unchanged while 3 declined (Fig. 4 and Table 2).

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New Orders

At 55.3 points, the new orders index grew for the eighteenth consecutive month, indicating increase in new orders in September 2018. Nine subsectors reported growth, 2 remained unchanged, while 3 contracted in the review month (Fig. 5 and Table 3).

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