In a notable shift, Nigeria’s manufacturing sector saw its first expansion in over a year, with the August 2024 Purchasing Managers Index (PMI) rising to 50.2 points, according to the Central Bank of Nigeria (CBN). This marks a recovery after 13 months of contraction, signaling renewed economic activity.
Thank you for reading this post, don't forget to subscribe!The report, which assessed 36 subsectors across Industry, Services, and Agriculture, revealed that 17 subsectors reported growth, with Primary Metal leading the charge. However, 19 subsectors, including Forestry, continued to decline. Key metrics such as Output (50.8), New Orders (50.5), and Stock of Raw Materials (51.3) showed positive signs, though Employment lagged at 48.7 points.
The Services sector expanded for the third consecutive month, rising to 50.7 points, driven by increased business activity and rising stock levels. Of the 14 subsectors, six—including Repair and Maintenance of Motor Vehicles—showed growth, while Transportation and Warehousing saw notable declines.
In Agriculture, the PMI reached 50.5 points, indicating recovery in Crop Production and Agricultural Support Services. However, Livestock, Fishing, and Forestry subsectors continued to struggle, with Employment in the sector also falling to 48.8 points.
The Industry sector, though still contracting with a PMI of 49.2 points, showed signs of improvement. Nine of its 17 subsectors recorded declines, while Primary Metal remained a growth leader. Declines in Output (49.2), New Orders (48.8), and Employment (47.5) reflect the ongoing challenges.
Cowry Research notes that while this modest recovery is encouraging, the private sector still faces significant challenges, including limited credit access, inflation, and inadequate infrastructure. Sustainable growth will require strategic investment and reforms to unlock the full potential of Nigeria’s economy.
