Nigeria’s manufacturing sector contracted by 14.3 index points from January and July 2020, the Central Bank of Nigeria (CBN) Purchasing Managers’ Index (PMI) data has shown.
The records show that in January, the manufacturing PMI was 59.2 points but had dropped to 44.9 points by July.
- Post COVID-19: Nigerian Youths Must Leverage on Skills to Contribute to Digital Economy – DG NITDA
- COVID-19: How businesses can survive — Personnel mgt institute
The details of July PMI released by the CBN indicated that The Manufacturing PMI in the month of July stood at 44.9 index points, indicating contraction in the manufacturing sector for the third consecutive month.
Daily Trust reports that the negative report was coming after the country slipped into over three months phased lockdown due to the COVID-19 pandemic outbreak.
The report said from the 14 surveyed subsectors – transportation equipment subsector reported growth (above 50% threshold) while nonmetallic mineral products sector reported no change.
However, the other 12 subsectors contracted with textile, apparel, leather and footwear and cement most affected.
The July PMI also showed that 44.7 points (production level index for the manufacturing sector) declined in July 2020 for the third consecutive month.
The employment level index for July 2020 stood at 40.0 points, indicating decline in employment level for the fourth consecutive month.
Of the 14 subsectors, three subsectors remain unchanged, while the remaining 11 subsectors recorded lower employment level in the review month
The CBN report also said at 43.2 points, the manufacturing sector inventories index contracted for the fourth month by July this year.
The non-manufacturing sector PMI stood at 43.3 points in July 2020, also indicating contraction in nonmanufacturing sector for the fourth consecutive month. The bank surveyed 17 subsectors with only two subsectors – arts, entertainment and recreation; and transportation and warehousing reporting growth of over 50%.
The 15 other subsectors had declines with the health care and social assistance and electricity, gas, steam and air conditioning supply worst hit.
Commenting, an economist and former Director General of the Abuja Chamber of Commerce and Industry (ACCI), Chijioke Okechukwu, said the Federal Government must roll out a deliberate intervention in the manufacturing sector as being done in the agricultural sector.
“Anybody seeing the body language and actions of the Federal Government will know that their efforts are mainly on the agricultural sector. Government will also have to make the same effort on the manufacturing sector,” he said.