The manufacturing purchasing managers’ index (PMI), an indicator of the economic health of the manufacturing sector, surge to 55.3 index points in September 2017 from 53.6 in August 2017, indicating expansion in the manufacturing sector for the sixth consecutive month, a Central Bank of Nigeria (CBN) PMI report for the same month released Thursday has shown.
The index report is a familiar data released at the start of the calendar month in developed markets such as the ISM’s in the US. It is based upon the responses of manufacturers to set questions on core variables in their businesses.
The CBN report indicated that 14 of the 16 sub-sectors reported growth in the review month in the following order: appliances & components; electrical equipment; chemical & pharmaceutical products; nonmetallic mineral products; printing & related support activities; plastics & rubber products; food, beverage & tobacco products; furniture & related products; transportation equipment; cement; paper products; computer & electronic products; textile, apparel, leather & footwear and fabricated metal products.
The remaining two sub-sectors – the primary metal and petroleum & coal products subsectors – contracted in the review month.
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CBN says the report is based on survey responses indicating the changes in the level of business activities in the current month compared with the preceding month, that for each of the indicators measured, the report shows the diffusion index of the responses.
Specifically, production level index for the manufacturing sector is reported to have grown for the seventh consecutive month in September 2017.
The production level index for the manufacturing sector grew for the seventh consecutive month in September 2017. At 58.8 points, the index indicated an increase in production at a faster rate, when compared to its level in the preceding month (57.4 points).
13 of the 16 manufacturing subsectors (as against 11 in the preceding month) recorded increase, while three subsectors declined during the review month with new orders index at 53.5 points, growing for the sixth consecutive month. Ten subsectors reported growth, while six subsectors contracted in the month of September, 2017
According to the report, the supplier delivery time index for the manufacturing sector stood at 55.4 points in September 2017, rose for the fourth consecutive month. Twelve subsectors recorded improved suppliers’ delivery time, two remained unchanged while two subsectors recorded delayed delivery time
Manufacturing employment level index for the month stood at 52.8 points, indicating growth in employment level for the fifth consecutive month. Of the sixteen subsectors, six grew, four remained unchanged while the other six subsectors recorded decline in employment level.
At 56.4 points, raw materials inventories index grew for the sixth consecutive month, and at a faster rate when compared to its level in August 2017. Twelve of the 16 subsectors recorded growth, one remained unchanged and the remaining three subsectors recorded decline in inventories.
The composite PMI for the non-manufacturing sector stood at 54.9 points in September 2017, indicating growth in non-manufacturing PMI for the fifth consecutive month.
Just like in August, of the 18 nonmanufacturing subsectors, 15 recorded growth in the following order: utilities; agriculture; health care & social assistance; finance & insurance; transportation & warehousing; electricity, gas, steam & air conditioning supply; repair, maintenance/washing of motor vehicles; public administration; wholesale/retail trade; water supply, sewage & waste management; educational services; arts, entertainment & recreation; information & communication; accommodation & food services; real estate rental & leasing.
The construction; management of companies; and professional, scientific & technical services sub sectors recorded contraction in the review period
Specifically, the business activity index rose marginally to 56.8 points in September 2017, indicating growth for the sixth consecutive month. The index grew at a faster rate, when compared to its level in the preceding month. Fourteen subsectors recorded growth in business activity, two remained unchanged and two declined in the review month
The PMI expansion for the past six months, according to analysts, is a clear indication that the economy is raring to consolidate its exit from recession.