Virus Outbreak Cuts Nigeria’s Manufacturers’ Speed To 42.4 points in May
OMOTAYO ARAOYE
The ravaging virus crisis broke the expansion speed of Nigeria’s manufacturing sector to 42.4 index points, slowing it down from 51.1 index points recorded two months earlier in March.
Equally, the non-manufacturing sector felt the impact of the Covid-19 pandemic which forced the unit to recede to 25.3 from 49.2 index points of March.
Covid-19 pandemic which ravaged and dislocated the global economy broke out in Nigeria in mid-March, forcing the closure of businesses and the entire economy to prevent its spread.
Both seaports and airports were closed to incoming raw materials and outgoing produced items except for essential items in a total lockdown of five weeks before the gradual easing which is currently on.
This caused a break in the manufacturing sector where plants have to shut down and workers stayed off or work remotely.
Nigeria’s Central Bank in its latest Purchasing Managers Index (PMI) for the manufacturing sector said the slowdown was the first contraction in 36 months of expansion by the sector which has been impacted by the dwindling economy prior to the outbreak of Coronavirus.
The survey was conducted by the CBN Statistics Department during the period May 14-19, 2020 surveying the manufacturing and non-manufacturing organizations in all 36 states in Nigeria and the Federal Capital Territory (FCT).
“Only the electrical equipment sector reported growth (above 50% threshold) in the review month, while the remaining 13 subsectors reported declines in the following order cement; petroleum & coal products; printing & related support activities; furniture & related products; textile, apparel, leather, and footwear; paper products; fabricated metal products” noted the apex bank in its May report.
Other subsectors include food, beverage & tobacco products; chemical & pharmaceutical products; transportation equipment; plastics & rubber products; nonmetallic mineral products; appliances and components, and primary metal”.
The survey indicated the intensification of the slowdown in the manufacturing sector was caused by the coronavirus pandemic and measures introduced to stem the spread of the virus.
“At 44.5 points, the production level index for the manufacturing sector declined in May 2020 after thirty-seven consecutive months of recorded growth. One subsector recorded increased production level, 4 remained unchanged, while nine subsectors recorded declines in production in May 2020”.
“At 42.8 points, the new orders index declined after thirty-sixth consecutive months of growth, indicating declines in new orders in May 2020. Three subsectors reported growth, 2 remained unchanged while 9 recorded declines in the review month”.
The manufacturing supplier delivery time index stood at 65.2 points in May 2020.
CBN stated that the growth in supplier delivery time was recorded from the contraction level of March 2020.
The data shows that the employment level index for May 2020 stood at 24.5 points, indicating a decline in employment level for the second month.
The manufacturing sector inventories index contracted for the second time in May 2020. At 37.4 points, the index further dipped when compared to its level in March 2020. All the 14 subsectors recorded reported lower raw material inventories in the review month.
According to the apex bank, Non-Manufacturing PMI Report Business activity, new orders, employment level, and inventories contracted in May 2020.
The composite PMI for the non-manufacturing sector stood at 25.3 points in May 2020, indicating contraction in Non-manufacturing PMI for the second consecutive month as the index declined below the turning point of 50 points in May.
“All of the 17 subsectors surveyed subsectors recorded declines (below the 50% threshold) in the following order: construction; repair, maintenance/washing of motor vehicles…; electricity, gas, steam & air conditioning supply; educational services; agriculture; finance & insurance; information & communication; water supply, sewage & waste management; accommodation & food services; real estate, rental & leasing; professional, scientific, & technical services; wholesale trade; health care & social assistance; management of companies; transportation & warehousing; arts, entertainment & recreation; utilities”.
The report stated that the Business Activity stood at 19.5 points index as it saw a decline for the first time after recording growth for thirty-six consecutive months.
CBN survey also shows that the employment level Index for the non-manufacturing sector stood at 32.0 points, indicating decrease in employment level in May.
The Non-manufacturing Inventory stood at 30.1 points, showing a decline for the second consecutive month.
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