The Central Bank of Nigeria’s (CBN) Manufacturing Purchasing Managers’ Index (PMI), an early indicator of manufacturing activity, rose to 50.2 for November from 49.4 index points for October, according to the latest PMI survey report posted on the apex bank’s website yesterday. It is the first time in seven months that the gauge of the country’s manufacturing sector has moved back into the expansion zone. Prior to its first contraction this year in May, the manufacturing PMI had recorded expansion for thirty-six consecutive months.
Industry watchers attribute the expansion in November to uptick in economic activity occasioned by the easing of coronavirus lockdown restrictions. According to the CBN, “a composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding. Fifty points indicates no change and below 50 points indicates that it is generally contracting.”
The report, however, showed that the PMI for the non-manufacturing sector stood at 47.6 points in November 2020 compared to 46.3 points in October, indicating slowing contraction in non-manufacturing activities. The report partly reads: “The Manufacturing PMI in the month of November stood at 50.2 index points, indicating recovery from contraction in the manufacturing sector recorded since May 2020. Of the 14 subsectors surveyed, eight subsectors reported expansion (above 50% threshold) in the review month in the following order: Transportation equipment, Non-metallic mineral products, Furniture & related products, Cement, Textile, apparel, leather & footwear, Plastics & rubber products, Food, beverage & tobacco products and Printing & related support activities sectors reported contractions in the following order: Electrical equipment, Petroleum & coal products, Chemical & pharmaceutical products, Primary metal, Paper products and Fabricated metal products.” Also, the report showed that the November 2020 production level index for the manufacturing sector stood at 51.7 points, indicating recovery from the contraction recorded since May 2020.
Similarly, at 50.5 points, the new orders index marginally expanded for the second time in the month of November rising to stand at 50.5 points. The manufacturing supplier delivery time index equally maintained its northward trend to stand at 52.2 points in November 2020, indicating a faster delivery time for the seventh month. However, the employment level index for November 2020 stood at 47.3 points, indicating contraction in employment level for the eighth consecutive months.