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Manufacturing PMI Stands at 48.2% in January 2017 from 52.0% in December 2016 - CBN

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Wednesday, February 01, 2017 9:22 AM / CBN 

Data and Method of Presentation  

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on data compiled from purchasing and supply executives. Survey responses indicate whether there is change or no change in the level of business activities in the current month compared with the previous month.  

For each of the indicators measured, this report shows the diffusion index of the responses. The diffusion index is computed as the percent of positive responses plus one-half of the percent of those reporting no change.  

The composite PMI is then computed as the weighted average of five diffusion indices for manufacturing sector: production level, new orders, supplier delivery time, employment level and raw materials inventory, with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively.  

The composite PMI for non-manufacturing sector is computed from four 2 diffusion indices: business activity, 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 declining.  

The sub-sectors reporting growth are listed in the order of highest to lowest growth. For the sub-sectors reporting contraction/decline, they are listed in the order of the highest to the lowest decline.  

Manufacturing PMI Report  

Production level growing at a slower rate, new orders declining from expansion in December 2016, supplier delivery time worsening , employment level declining faster and raw material inventories declining from expansion in December 2016 

The Manufacturing PMI stood at 48.2 index points in January 2017, indicating a decline in the manufacturing sector during the review period. The index averaged 45.2 in the last twelve months, and had grown in December 2016 after recording declines for eleven consecutive months. (Fig. 2 and Table 1).  

Ten of the sixteen sub-sectors surveyed recorded decline in the review month in the following order: primary metal; transportation equipment; paper products; electrical equipment; fabricated metal products; printing & related support activities; cement; furniture & related products; plastics & rubber products; and chemical & pharmaceutical products.  

The remaining six subsectors are expected to expand in the order: petroleum & coal products; appliances & components; nonmetallic mineral products; food, beverage & tobacco products; textile, apparel, leather & footwear; and computer & electronic products. 

 

 

Production Level  

The production level index for manufacturing sector grew for the second consecutive month. The index stood at 51.3 points, indicating a slower growth when compared to the 57.6 points in the month of December 2016.  

Nine manufacturing sub-sectors recorded growth in production level during the review month in the following order: nonmetallic mineral products; computer & electronic products; appliances & components; food, beverage & tobacco products; petroleum & coal products; cement; chemical & pharmaceutical products; textile, apparel, leather & footwear; and furniture & related products.  

The plastics & rubber products sub-sector remained unchanged, while the remaining six sub-sectors declined in the review period in the order: primary metal; transportation equipment; paper products; fabricated metal products; electrical equipment; and printing & related support activities (Table 2). 

 

New Orders  

The index for new orders declined to 47.9 points after one month of expansion recorded in December 2016. The eight sub-sectors that declined in new orders were: primary metal; paper products; printing & related support activities; fabricated metal products; electrical equipment; transportation equipment; cement; and furniture & related products.  

The chemical & pharmaceutical products sub-sector remained unchanged, while new orders for the remaining seven sub-sectors grew in the order: petroleum & coal products; appliances & components; computer & electronic products; plastics & rubber products; textile, apparel, leather & footwear; nonmetallic mineral products; and food, beverage & tobacco products (Table 3). 

  

Supplier Delivery Time  

At 48.5 index points, the supplier delivery time index for manufacturing sub-sectors worsened for the second consecutive month, but at a slower rate in the month of January 2017.  

The index had recorded nine consecutive periods of improvement as at November 2016. Ten sub-sectors recorded worsening suppliers’ delivery time in the following order: plastics & rubber products; petroleum & coal products; chemical & pharmaceutical products; transportation equipment; appliances & components; cement; nonmetallic mineral products; food, beverage & tobacco products; furniture & related products; and textile, apparel, leather & footwear.  

The computer & electronic products sub-sector remained unchanged, while the electrical equipment; primary metal; printing & related support activities; fabricated metal products; and paper products subsectors recorded improving delivery time in January (Table 4). 

  

Employment Level  

Employment level index in the month of January 2017 stood at 45.3 points, indicating declines in employment level for the twenty-third consecutive month.  

However, the index declined at a faster rate when compared with the level in the preceding month. Of the sixteen sub-sectors, twelve recorded declines in the following order: electrical equipment; computer & electronic products; appliances & components; cement; printing & related support activities; nonmetallic mineral products; furniture & related products; paper products; chemical & pharmaceutical products; fabricated metal products; food, beverage & tobacco products; and textile, apparel, leather & footwear.  

The plastics & rubber products; primary metal; and transportation equipment subsectors remained unchanged, while only the petroleum & coal products sub-sector recorded growth during the review period (Table 5). 

  

Raw Materials Inventory 

At 46.3 points, the raw materials inventory index declined after one month of growth.  

Of the sixteen sub-sectors, thirteen recorded decline in raw materials inventories in the order: computer & electronic products; petroleum & coal products; electrical equipment; primary metal; transportation equipment; printing & related support activities; furniture & related products; fabricated metal products; plastics & rubber products; paper products; textile, apparel, leather & footwear; cement and chemical & pharmaceutical products.  

The remaining three sub-sectors recorded increased inventories in the order: appliances & components; food, beverage & tobacco products and nonmetallic mineral products (Table 6).

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