- Nigeria’s Manufacturing Activities Declined in February
The Nigerian manufacturing sector declined in February for the second consecutive months, after expanding 52.0 in December 2016.
The Manufacturing Purchasing Managers’ Index (PMI), which measures the economic health of the manufacturing sector contracted to 44.6 in February from 48.2 recorded in January, according to the Central Bank of Nigeria report released on Wednesday.
Reading above 50 indicates economic expansion and below 50 signifies contraction.
The CBN’s report showed production level plunged in the month under review, while both the new orders and employment level declined faster. The report also indicated that material inventories across the sector are declining at a faster pace.
According to the PMI report, 14 of the 16 sub-sectors reported decline, only the appliances & components and food, beverage & tobacco products subsectors expanded in February.
Similarly, 12 of the manufacturing sub-sectors recorded decline in production level in February, shrinking the production level index of the sector to 45.2 from 51.3 recorded in January.
Also, employment index of the manufacturing sector revealed job creation has been on the decline for the past 2 years, but the rate of job creation has worsened in recent months when compared with the preceding months. The low activities has further reduced capacity utilisation to 45.6 from 50 in January.
Overall, the manufacturing sector of the nation remained weak and requires urgent attention. However, few experts have said if the CBN can sustain its new forex policy of reducing scarcity by increasing forex liquidity that the manufacturing sector will revamp as the main issue of the manufacturers is their inability to access forex at a moderate rate for raw materials.