March 2016 PMI: Manufacturing PMI Improves Marginally to 45.9% - CBN

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Tuesday, April 05, 2016 4:42PM /CBN 

The Statistics Department, Central Bank of Nigeria conducts on monthly basis the survey of purchasing and supply executives of manufacturing and non-manufacturing organizations in 13 locations in Nigeria: - two states in each of the six geo-political zones, and the FCT (Fig. 1).  

The survey result is used to compute the monthly Purchasing Managers’ Index (PMI). The survey was conducted during March 14-22, 2016 with a total retrieval of 1,564 out of 1,850 questionnaires administered, giving a response rate of 84.5 per cent.  

The Bank makes no representation regarding the individual company, other than that stated by the respondents. The data contained herein could be compared with other economic data in taking policy decisions.


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 reflect the change, if any, in the current month compared with the previous month. For each of the indicators measured, this report shows the percentage response and the diffusion index.  

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 the weighted average of five diffusion indices: production level, new orders, supplier delivery time, employment level and raw materials inventory, with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively.

Diffusion indices have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A composite PMI reading above 50 percent indicates that the manufacturing economy is generally expanding, 50 percent indicates no change, and below 50 percent indicates that it is generally declining.  

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

Manufacturing PMI Report

Production level, employment and raw material inventories declining at a slower rate; new orders declining at a faster rate; supplier delivery time improving at a slower rate

 

The Manufacturing PMI improved marginally to 45.9 per cent in March 2016, compared to 45.5 per cent in the preceding month (Fig. 2 and Table 1). This implies that the manufacturing sector declined at a slower rate during the review period. Of the sixteen manufacturing sub-sectors, twelve reported decline in the review month in the following order: transportation equipment; furniture & related products; plastics & rubber products; textile, apparel, leather & footwear; printing & related support activities; nonmetallic mineral products; paper products; fabricated metal products; primary metal; computer & electronic products; appliances & components and electrical equipment.  

The remaining four sub-sectors however reported expansion in the following order: petroleum & coal products; food, beverage & tobacco products; cement and chemical & pharmaceutical products.



Production Level
At 46.6 percent, the production level index for manufacturing sector declined for the third consecutive month, but at a slower rate than the preceding month. Of the sixteen manufacturing sub-sectors, twelve reported decline in production during the review month in the following order: transportation equipment; plastics & rubber products; textile, apparel, leather & footwear; nonmetallic mineral products; primary metal; printing & related support activities; furniture & related products; paper products; computer & electronic products; fabricated metal products; cement and chemical & pharmaceutical products.  

The appliances & components sub-sector reported no change. The remaining three reported growth in production level during the review month in the following order: petroleum & coal products; food, beverage & tobacco products and electrical equipment (Table 2).


New Orders
New Orders Index remained the same at 43.0 per cent in March 2016. However, the index has been on the decline for the third consecutive month. Thirteen sub-sectors reported decrease in new orders: transportation equipment; textile, apparel, leather & footwear; furniture & related products; printing & related support activities; computer & electronic products; plastics & rubber products; primary metal; nonmetallic mineral products; paper products; fabricated metal products; appliances & components; cement and electrical equipment. The remaining three sub-sectors reported growth in new orders as follows: petroleum & coal products; chemical & pharmaceutical products and food, beverage & tobacco products (Table 3).

Supplier Delivery Time
At 50.6 per cent, the supplier delivery time index for manufacturing sub-sectors improved for the second consecutive month, after twelve months of worsening delivery time. Eight sub-sectors reported faster suppliers’ delivery time in the following order: plastics & rubber products; textile, apparel, leather & footwear; appliances & components; primary metal; cement; petroleum & coal products; furniture & related products and electrical equipment. The transportation equipment sub-sector reported no change.  

The remaining seven sub-sectors reported worsening delivery time in March in the order: food, beverage & tobacco products; nonmetallic mineral products; computer & electronic products; fabricated metal products; printing & related support activities; paper products and chemical & pharmaceutical products (Table 4).


Employment Level
Employment level index in the month of March stood at 45.5 percent, indicating declines in employment for the thirteenth consecutive month. The employment index declined at a slower rate when compared with the level in February 2016. Of the sixteen sub-sectors, thirteen recorded decline in the following order: electrical equipment; plastics & rubber products; fabricated metal products; furniture & related products; paper products; appliances & components; primary metal; textile, apparel, leather & footwear; food, beverage & tobacco products; petroleum & coal products; nonmetallic mineral products; printing & related support activities and chemical & pharmaceutical products.

The remaining three sub-sectors reported growth in the following order: transportation equipment; computer & electronic products and cement (Table 5).

Raw Materials Inventory
Raw materials inventory index rose in the month of March to 47.1 from 44.7 per cent in the previous month, indicating declines in raw materials inventory for the third consecutive month. Ten of the sixteen sub-sectors reported lower raw materials inventories in the following order: appliances & components; petroleum & coal products; plastics & rubber products; furniture & related products; textile, apparel, leather & footwear; printing & related support activities; nonmetallic mineral products; paper products; chemical & pharmaceutical products and food, beverage & tobacco products.  

 

The electrical equipment sub-sector reported no change, while the remaining five subsectors reported growth in inventories in the following order: transportation equipment; computer & electronic products; primary metal; fabricated metal products and cement (Table 6).

 

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