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Manufacturing PMI Stands at 52.0% in December from 46.0% in November 2016 - CBN

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Wednesday, January 04, 2017 12:02 PM/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 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, new orders, and raw material inventories expanding from contraction; employment level declining slower; and supplier delivery time worsening from improving December 2016

The Manufacturing PMI stood at 52.0 index points in December 2016, indicating expansion in the manufacturing sector during the review period. The index had recorded declining in the preceding eleven months (Fig. 2 and Table 1).

Eight of the sixteen sub-sectors surveyed recorded expansion in the review month in the following order: cement; food, beverage & tobacco products; textile, apparel, leather & footwear; plastics & rubber products; paper products; appliances & components; chemical & pharmaceutical products; and furniture & related products.

The fabricated metal products sub-sector remained unchanged, while the remaining seven subsectors declined in the order: computer & electronic products; electrical equipment; primary metal; transportation equipment; petroleum & coal products; printing & related support activities; and nonmetallic mineral products.





Manufacturing Production Level
At 57.6 index points, the production level index for manufacturing sector indicated the sector expanded in the review period, compared to the decline recorded in the preceding eleven months. Five manufacturing sub-sectors recorded growth in production level during the review month in the following order: cement; food, beverage & tobacco products; electrical equipment; plastics & rubber products; and textile, apparel, leather & footwear.

The appliances & components sub-sector remained unchanged, while the remaining ten sub-sectors declined in the review period in the order: primary metal; petroleum & coal products; computer & electronic products; transportation equipment; furniture & related products; fabricated metal products; nonmetallic mineral products; paper products; chemical & pharmaceutical products; and printing & related support activities (Table 2).



Manufacturing New Orders
At 51.8 points, the new orders index showed expansion in new orders after eleven months of contraction. It stood at 45.1 in November 2016. The five sub-sectors that recorded expansion in new orders were: cement; food, beverage & tobacco products; textile, apparel, leather & footwear; paper products; and fabricated metal products.

The plastics & rubber products sub-sector remained unchanged, while the remaining ten sub-sectors declined in the order: primary metal; electrical equipment; transportation equipment; appliances & components; petroleum & coal products; printing & related support activities; computer & electronic products; nonmetallic mineral products; furniture & related products; and chemical & pharmaceutical products (Table 3).



Manufacturing Supplier Delivery Time
At 47.9 index points, the supplier delivery time for manufacturing sub-sectors contracted in the month of December 2016, after nine consecutive periods of expansion.

Nine sub-sectors recorded worsening suppliers’ delivery time in the following order: transportation equipment; food, beverage & tobacco products; cement; textile, apparel, leather & footwear; paper products; printing & related support activities; chemical & pharmaceutical products; plastics & rubber products; and nonmetallic mineral products.

The computer & electronic products and electrical equipment sub-sectors remained unchanged, while the appliances & components; primary metal; furniture & related products; petroleum & coal products; and fabricated metal products subsectors recorded improving delivery time in December (Table 4).



Manufacturing Employment Level
Employment level index in the month of December 2016 stood at 48.6 points, indicating declines in employment level for the twenty-second consecutive month. However, the index shows a slowing contraction in manufacturing employment when compared with the level in the preceding month.

Of the sixteen sub-sectors, nine recorded contraction in employment in the following order: computer & electronic products; electrical equipment; appliances & components; printing & related support activities; furniture & related products; chemical & pharmaceutical products; primary metal; fabricated metal products; and nonmetallic mineral products.

The paper products; petroleum & coal products; and transportation equipment sub-sectors remained unchanged, while the cement; plastics & rubber products; food, beverage & tobacco products; and textile, apparel, leather & footwear sub-sectors recorded expansion during the review period (Table 5).



Manufacturing Raw Materials Inventory
At 51.6 index points, the index shows an expansion in raw materials inventory in the review month, after declining for eleven consecutive months.

Of the sixteen sub-sectors, eight recorded expansion in raw materials inventories in the order: cement; food, beverage & tobacco products; textile, apparel, leather & footwear; plastics & rubber products; chemical & pharmaceutical products; transportation equipment; appliances & components; and paper products.

The remaining eight sub-sectors recorded decline in inventories in the order: petroleum & coal products; computer & electronic products; electrical equipment; primary metal; nonmetallic mineral products; furniture & related products; fabricated metal products; and printing & related support activities (Table 6)



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