CBN’s PMI report indicates decline in economic activities in February

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By Babajide Komolafe
THE Central Bank of Nigeria, CBN, yesterday, released its Purchasing Managers Index (PMI) report for February, 2017 which indicated continued decline in economic activities, coming against the backdrop of the bottoming-out of recessionary trend as reported earlier in the week by the National Bureau of Statistics, NBS.

The PMI is based on survey of purchasing and supply executives of manufacturing and non-manufacturing organizations in 13 locations across the country. According to the CBN, the Manufacturing PMI declined for the second consecutive months to 44.6 points while the non manufacturing PMI declined for the fourteenth consecutive months to 44.5 points.

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The report revealed that in February, 29 subsectors out of the 34 surveyed in the manufacturing and non-manufacturing sectors experienced decline in activities.

Manufacturing and  non-manufacturing sectors

It revealed that in the manufacturing sector, production level contracted, new orders declined at a faster rate, supplier delivery time worsened at a slower rate, employment level declined faster, and raw material inventories declined at a faster rate

Also in the non-manufacturing sector, CBN reported that inventories in performance headings of business activity, new orders, employment level and raw materials declined during the month. The report stated: “The Manufacturing PMI stood at 44.6 index points in February 2017, indicating declines in the manufacturing sector for two consecutive months after an incidence of expansion in December 2016. Fourteen of the sixteen sub-sectors reported declines in the review month in the following order: transportation equipment; paper products; electrical equipment; printing and related support activities; fabricated metal products; chemical and pharmaceutical products; furniture and related products; cement; plastics and rubber products; petroleum and coal products; textile, apparel, leather and footwear; computer and electronic products; non-metallic mineral products and primary metal. The appliances and components and food, beverage and tobacco products subsectors reported expansion in the review period.

“The production level index for manufacturing sector contracted in February 2017. The index at 45.2 points indicated a decline in production level when compared to the 51.3 points in the previous month.” For new orders, the report stated: “At 44.0 points, the index declined for the second consecutive month after recording growth and expansion in December 2016. The index declined at a faster rate when compared to the level achieved in January 2017.

On supplier delivery time the report stated: “At 48.7 index points, the supplier delivery time index for manufacturing sub-sectors worsened for the third consecutive month, but at a much slower rate in the month of February 2017.”

According to the report, “Employment level index in the month of February 2017 stood at 41.7 points, indicating declines in employment level for the twenty-fourth consecutive month. However, the index declined at a faster rate when compared with the level in the preceding month.” It further stated: “The composite PMI for the non-manufacturing sector declined for the fourteenth consecutive month. The index stood at 44.5 points, indicating a faster decline when compared to the 49.4 points in January 2017.

“Of the eighteen non-manufacturing sub-sectors, fifteen recorded declines in the following order: construction; professional, scientific, and technical services; water supply, sewage and waste management; accommodation and food services; public administration; arts, entertainment and recreation; real estate, rental and leasing; utilities; wholesale trade; information and communication; finance and insurance; repair, maintenance/washing of motor vehicles; health care and social assistance; electricity, gas, steam and air conditioning supply and transportation and warehousing.

The management of companies remained the same, while the educational services and agriculture reported increase in the review month. “The business activity index dropped to 45.4 points in February 2017, from its expansionary level of 50.6 points in January 2017.

“At 44.9 points, the new orders index declined at a faster rate in February 2017 after thirteen months consecutive decline. The employment level Index for the non-manufacturing sector stood at 42.6 points indicating a decline in employment for the fourteen consecutive months. Non-manufacturing inventories/work in progress index fell in February 2017 to 44.9 points from the 52.0 points in the previous month”

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