CBN PMI Index Slow Down In June
By CHUKWUMAH KELECHUKWU.
Manufacturing sector growth was slower in June when compared with that of May, the latest CBN Purchasing Managers Index released on Tuesday
has shown.
However, the manufacturing purchasing managers index (PMI) in the month of June stood at 57.4 index points, indicating expansion in the sector for the twenty-seventh consecutive month.
The composite PMI for the manufacturing sector is computed as the weighted average of five diffusion indices where index points below 50 is interpreted as contraction while above 50 index points indicate expansion.
Although at 57.4 index points there was expansion but it was slower when compared with the level recorded in previous month of May, the CBN report stated.
The survey conducted by the Statistics Department of the Central Bank of Nigeria between June 10 and 14, 2019 also indicated that employment levelindex for June 2019 stood at 57.5 points, indicating growth in employment level for the twenty-sixth consecutive month.
According to the report, ten out of the 14 sub-sectors surveyed reported increased employment level, two reported unchanged employment level while other two reported decreased employment in the review month.
This report is coming a month after President Muhammadu Buhari was sworn in for a second term in office but has yet to constitute his cabinet, a development which industry experts said is directly responsible for sharp decline in business.
“You cannot leave a vacuum as huge as a lack of cabinet and you expect businesses to thrive. Businesses are predicated on policy thrust. And the lack of it (policy direction) leaves a lot to desire,” a member of the Manufacturers Association of Nigeria (MAN) who did not mention told our correspondent on Tuesday.
He faulted CBN’s consistently positive PMI reports as being at odds with the reality in Nigeria’s manufacturing sector. According to him, the employment growth which the PMI report indicated is far from reality.
The PMI survey conducted by the Statistics Department of the Central Bank of Nigeria between June 10 and 14, 2019 sampled respondents across purchasing and supply executives of manufacturing and non-manufacturing organizations in all 36 states in Nigeria and the Federal Capital Territory (FCT).
According to the report 14 sub-sectors were surveyed, and 12 reported growth in the review month while the nonmetallic mineral products and primary metal sub-sectors recorded declines in the review period.
The sectors which reported growth according to CBN are transportation equipment; petroleum & coal products; cement; chemical & pharmaceutical products; electrical equipment; food, beverage & tobacco products; printing & related support activities; fabricated metal products; paper products; furniture & related products; textile, apparel, leather & footwear; and plastics & rubber products.
Production levels for manufacturing sector also accelerated at 59.3 points in the review period. It was the twenty-eighth consecutive month of growth in production level index.
“The index indicated a faster growth in the current month, when compared to its level in the month of May 2019.Twelve of the 14 manufacturing sub-sectors recorded increased production level, 1 remained unchanged while 1 recorded decline,” the report stated.
The report further stated that there were increase in new orders as the index grew for the twenty-seventh consecutive month in June 2019 to 55.9 points. On new orders, eight sub-sectors were said to have reported growth, one remained unchanged, while five contracted in the review month.
In terms of supplier delivery time, the index stood at 58.7 points in June 2019, indicating faster manufacturing supplier delivery time. With eleven of the 14 sub-sectors recording improved suppliers’ delivery time, the index recorded growth for twenty-fifth consecutive months.
However, one of sub-sectors remained unchanged while two recorded decline in the review period.
At 55.0 points, the raw material inventories index grew for the twenty-seventh consecutive month in June 2019. However, the index grew at a slower rate when compared to its level in May 2019.
Ten of the 14 sub-sectors recorded growth, two remain unchanged, while two sectors reported decline draw material inventories in the review month.
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