Purchasing Manager index which measure the pulse of the economy indicates that production level, new orders, supplier delivery time, employment level and raw materials inventory are growing at a faster rate than before.
According to a survey conducted by the Central Bank of Nigeria the Purchasing Manager PMI stood at 54.1 index points in July 2017, indicating expansion in the manufacturing sector for the fourth consecutive month. Eleven of the 16 sub-sectors reported growth in the review month in the following order: appliances & components; computer & electronic products; cement; primary metal; chemical & pharmaceutical products; food, beverage & tobacco products; textile, apparel, leather & footwear; printing & related support activities; paper products; electrical equipment and transportation equipment.
The remaining 5 sub-sectors declined in the order: petroleum & coal products; fabricated metal products; furniture & related products; nonmetallic mineral products and plastics & rubber products.
Also FBNCapital Research said that the July’s PMI reading shows another improvement in the headline from 55.9 recorded in June to 56.3. Manufacturers generally have better access to imported inputs on the back of the CBN’s increased foreign exchange interventions which have boosted foreign exchange liquidity significantly. In this context, the Manufacturers Association of Nigeria (MAN) recently disclosed that its members are gradually benefiting from investment in several import substitution projects which have assisted with improving the supply of local substitutes for inputs particularly in the food and beverages segment.
According to CBN survey “The production level index for the manufacturing sector grew for the fifth consecutive month in July 2017. The index at 59.3 points indicated an expansion in production at a faster rate, when compared to the level recorded in the previous month. Fourteen of the sixteen manufacturing sub-sectors recorded expansion in production level during the review month.
“At 52.7 points, new orders index grew for the fourth consecutive month. Eight sub-sectors reported growth, one remained unchanged while the remaining seven declined in the review month. The supplier delivery time index for the manufacturing sector, at 51.3 points in July 2017, rose for the second consecutive month. Ten sub-sectors recorded improved suppliers’ delivery time while the remaining 6 sub-sectors recorded delayed delivery time “Manufacturing employment level index in July 2017 stood at 51.8 points, indicating growth in employment level for the third consecutive month. Of the sixteen sub-sectors, eight recorded growth, three sub-sectors remained unchanged while the remaining five sub-sectors recorded decline in employment level.”
According to the survey “at 53.6 points, the raw materials inventory index grew for the fourth consecutive month, and at a faster rate compared to its level in June 2017. Eleven of the sixteen sub-sectors recorded growth, two recorded no change while three sub-sectors recorded decline in raw materials inventory. The composite PMI for the non-manufacturing sector grew to 54.4 points in July 2017, indicating growth in Non-manufacturing PMI for the third consecutive month. Of the eighteen non- manufacturing sub-sectors, sixteen recorded growth in the following order:
agriculture; public administration; utilities; information & communication; finance & insurance; transportation & warehousing; educational services; management of companies; repair, maintenance/ washing of motor vehicles; health care & social assistance; electricity, gas, steam & air conditioning supply; real estate, rental & leasing; wholesale trade; professional, scientific, & technical services; water supply, sewage & waste management and accommodation & food services. The construction and arts, entertainment & recreation sub sectors recorded contraction in the Non- manufacturing PMI.
The business activity index rose to 56.8 points in July 2017 for the fourth consecutive month. The index grew at a slower rate, when compared to its level in the previous month. Fourteen sub-sectors recorded growth in business activity, one remained unchanged while the remaining three declined in the review month. New orders index at 55.1 points grew in July 2017 for the fourth consecutive month. Of the eighteen sub-sectors, fifteen reported growth, one remained unchanged while the remaining two recorded declines
It said “the employment level Index for the non- manufacturing sector stood at 54.0 points, indicating growth in employment for the third consecutive month. Fourteen sub-sectors recorded growth in the review month, one remained unchanged while the remaining three recorded declines. At 51.9 points, non-manufacturing inventory index grew for the third consecutive month, indicating growth in inventories in the review period. Twelve sub-sectors recorded higher inventories, two remained unchanged while the remaining four sub-sectors recorded lower inventory in July, 2017” the survey said
