PMI Readings Show Pessimism in the Month of December 2020

Proshare

Tuesday, December 29, 2020   / 11:02 AM / By CSL Research / Header Image Credit: Nairaland Forum

 

According to the data released by the Central Bank of Nigeria (CBN) on the Purchasing Managers' Index (PMI) for the month of December, activity levels in both the manufacturing and non-manufacturing sectors showed a decline compared with the previous month (November) and both PMI readings were below the 50-point threshold. Specifically, the manufacturing PMI decelerated to 49.6 in December from 50.2 in November, indicating a contraction compared with the previous month. Similarly, the non-manufacturing PMI declined to 45.7 in December from 47.6 in November, indicating a steeper contraction in the sector.

 

Across the key indices in the manufacturing PMI, while some indices experienced  marginal decline like Production level (-0.1) and New orders (-0.3), the remaining indices witnessed moderate decrease like the  Suppliers' delivery time (-1.0), Employment level (-1.0) and Raw materials/WIP Inventory (-1.6). In our opinion, infrastructural challenges (such as faulty or obsolete machines), FX scarcity which continues to limit the ability to produce more and import raw materials, weakening consumer demand evidenced in the decline in raw materials/WIP and new orders respectively coupled with weak labour employment were the major contributors to the slowdown in the manufacturing sector. The data further showed that, of the 14 subsectors surveyed in the manufacturing sector, four compared with six in November reported growth while nine compared with eight in November contracted. 

 

In the same vein, the non-manufacturing PMI also showed weakness across the four key indices used in measuring activity level; New orders (46.9 to 45.1), Employment level ( 46.7 to 45.1), Inventory level (46.1 to 45.7) and Business activity contracted from the expansionary level of 50.5 recorded in the previous month to 46.9. We believe the Covid-19 second wave causing movement restrictions has limited the scale of operations of service-based organisatons.

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Related News

  1. Manufacturing PMI Stands at 49.6% in December 2020 from 50.2% in November 2020
  2. FGN's Q3 2020 Deficit on Target, Spending Compressed
  3. CBN Poll: Respondent Firms Expect the Naira to Depreciate Next Month
  4. Economic Crisis to Sink 7million People into Poverty in Nigeria
  5. Revenue Collection Again Below Benchmark in Q3 2020
  6. CBN Poll: 60.8% of Respondents Believe Nigerian Economy would End Up Weaker if Prices Rise Faster
  7. Interest Rates on the Rise
  8. The Nigeria's FX Crisis: Overarching Consequences of Insecurity and Structural Deficiency
  9. 2020: A Year to Remember or A Year to Forget? - LBS Executive Breakfast Session - December 2020
  10. NBS Publishes COVID-19 Impact Monitoring Survey Report for October 2020
  11. Border Reopened After Inflation Spiked
  12. Headline Inflation Increases By 14.89% YoY In November 2020, 0.66% Higher Than October 2020 Rate
  13. Oil Above US$50.00 per Barrel
  14. Q3 2020 GDP Report: Deepest Recession in Decades Offers Opportunity for Extraordinary Reforms
  15. Capital Importation into Nigeria Stood At $1,461.49m in Q3 2020 - NBS
  16. The Nigerian Manufacturing Sector: MAN Warns of Impending Shop Closure
  17. HKSAAN2020: Governor Fayemi Highlights How Africa Could Benefit From Its Demography
  18. Infrastructure Development in Nigeria: The PPP Approach
  19. Nigeria's Inflation-Galloping Towards 15%
  20. A Fourth Successive Trade Deficit
  21. Trade Deficit Expands to a New 4-Year High in Q3 2020


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP