Manufacturing Sector Recovers After Six-Month Contraction

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The nation’s manufacturing sector has snapped out of the doldrums after contracting for six straight months, a new survey by the Central Bank of Nigeria has shown.

The CBN, in its latest Purchasing Managers’ Index Survey Report, said the manufacturing PMI stood at 50.2 index points in November, indicating a recovery from the contraction recorded in the manufacturing sector since May 2020.

“Of the 14 subsectors surveyed, eight subsectors reported expansion (above 50 per cent threshold) in the review month,” it said.

According to the report, the subsectors that expanded are transportation equipment; nonmetallic mineral products; furniture and related products; cement; textile, apparel, leather and footwear; plastics and rubber products.

Others were food, beverage and tobacco products, as well as printing and related support activities.

But six subsectors – electrical equipment; petroleum and coal products, chemical and pharmaceutical products; primary metal; paper products, and fabricated metal products – contracted in November.

The CBN said, “The November 2020 production level index for the manufacturing sector stood at 51.7 points, indicating recovery from the contraction recorded since May 2020.

“Of the 14 subsectors surveyed, seven subsectors recorded expanding production levels, three subsectors reported stationary levels of production, while four subsectors still recording contraction in production level.”

The new orders index marginally expanded for the second time in November, at 50.5 points, while the manufacturing supplier delivery time index stood at 52.2 points.

It said, “The employment level index for November 2020 stood at 47.3 points, indicating contraction in employment level for the eighth consecutive months.

“Of the 14 subsectors, five subsectors recorded growth in employment level while nine subsectors recorded lower employment level in the review month.”

According to the report, the manufacturing sector inventories index contracted for the eighth time in November, as it stood at 48.5 points.

“Two of the 14 subsectors recorded growth in inventories, while the remaining 12 subsectors recorded lower raw material inventories in the review month,” it said.

The CBN said the PMI for the non-manufacturing sector stood at 47.6 points in November, indicating slowing contraction in non-manufacturing activities.

It said of the 17 surveyed sub-sectors, only three – transportation and warehousing; health care and social assistance, and agriculture – reported growth.

The report said, “The employment level index for the non-manufacturing sector in the month of November 2020 stood at 46.7 points, indicating contraction in employment level for the eighth consecutive months.

“Three of the 17 subsectors reported growth in employment level (above 50 per cent threshold), one sector reported stationary level, while the remaining 13 subsectors recorded declines in new orders in the review month.”

– Punch

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