Nigeria's Manufacturing Index Declines in January

Obinna Chima

The Manufacturing Purchasing Managers’ Index (PMI) stood at 48.2 index points in January 2017, indicating a decline in the manufacturing sector during the review period.
The index averaged 45.2 in the last twelve months, and had grown in December 2016 after recording declines for 11 consecutive months.

The PMI is an indicator of the economic health of the manufacturing sector.
The January 2017 PMI report released by the Central Bank of Nigeria (CBN) tuesday, showed that 10 of the 16 sub-sectors surveyed recorded decline in the review month in the following order: primary metal; transportation equipment; paper products; electrical equipment; fabricated metal products; printing & related support activities; cement; furniture & related products; plastics & rubber products; and chemical & pharmaceutical products.

The remaining six sub-sectors were expected to expand in the order: petroleum & coal products; appliances & components; nonmetallic mineral products; food, beverage & tobacco products; textile, apparel, leather & footwear; and computer & electronic products.

But the report showed that the production level index for manufacturing sector grew for the second consecutive month. The index stood at 51.3 points, indicating a slower growth when compared to the 57.6 points in the month of December 2016. According to the report, nine manufacturing sub-sectors recorded growth in production level during the review month in the following order: non-metallic mineral products; computer & electronic products; appliances & components; food, beverage & tobacco products; petroleum & coal products; cement; chemical & pharmaceutical products; textile, apparel, leather & footwear; and furniture & related products.

The plastics & rubber products sub-sector remained unchanged, while the remaining six sub-sectors declined in the review period in the order: primary metal; transportation equipment; paper products; fabricated metal products; electrical equipment; and printing & related support activities.

Nevertheless, the index for new orders declined to 47.9 points after one month of expansion recorded in December 2016. The eight sub-sectors that declined in new orders were: primary metal; paper products; printing & related support activities; fabricated metal products; electrical equipment; transportation equipment; cement; and furniture & related products.

At 48.5 index points, the supplier delivery time index for manufacturing sub-sectors worsened for the second consecutive month, but at a slower rate in the month of January 2017. The index had recorded nine consecutive periods of improvement as at November 2016.