Nigeria’s Manufacturing sector contracts for 5th consecutive month as recession looms

A worker assembles a car at a Nissan's manufacturing plant in Rosslyn, outside Pretoria, file. REUTERS/Siphiwe Sibeko

The Manufacturing PMI in the month of September stood at 46.9 index points, indicating contraction in the manufacturing sector for the fifth time. Of the 14 subsectors surveyed, 4 subsectors reported expansion (above 50% threshold) in the review month in the following order: electrical equipment; transportation equipment; cement and nonmetallic mineral products.

The remaining subsectors reported contractions in the following order: petroleum & coal products; primary metal; furniture & related products; printing & related support activities; food, beverage & tobacco products; textile, apparel, leather & footwear; chemical & pharmaceutical products; fabricated metal products and plastics & rubber products; while paper product subsector was stable.

In September 2020, supplier delivery time grew faster, while Production level, new orders, employment level and raw materials inventories contracted.

Production Level
At 47.3 points, the production level index for the manufacturing sector indicated contraction in September 2020 for the fifth consecutive month. Of the 14 subsectors surveyed, 5 subsectors recorded an increased production level, 1 subsector reported the same level of production, while 8 subsectors recorded declines in production in September 2020.

New Orders
At 46.4 points, the new orders index contracted in September 2020 for the fifth consecutive month. Six subsectors reported expansion in new orders, while the remaining 8 recorded contractions in the review month.

Supplier Delivery Time
The manufacturing supplier delivery time index stood at 53.5 points in September 2020, indicating faster supplier delivery time for the fifth time. Six of the 14 subsectors recorded improved suppliers delivery time, 5 subsectors reported the same level, while 3 subsectors recorded slower delivery time.

Employment Level

The employment level index for September 2020 stood at 44.1 points, indicating contraction in employment level for the sixth consecutive month. Of the 14 subsectors, 2 subsectors recorded growth in employment, 3 subsectors recorded the same level of employment, while the remaining 9 subsectors recorded lower employment level in the review month.

Raw material Inventories

The manufacturing sector inventories index contracted for the sixth consecutive time. At 43.0 points, the index declined in the review month. Four of the 14 subsectors recorded growth in inventories, while the remaining 10 subsectors recorded lower raw material inventories in the review month.

The September 2020 PMI survey was conducted by the Statistics Department of the Central Bank of Nigeria during the period August 10-14, 2020. The respondents were purchasing and supply executives of manufacturing and non-manufacturing companies in the 36 states in Nigeria and the Federal Capital Territory (FCT). The Bank makes no representation regarding the individual companies, other than the information they have provided. The data contained herein further provides input for policy decisions.

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