Nigeria’s Manufacturing Sector Contracts For the First Time in 36 Months

• Nigeria’s Manufacturing Sector Contracts For the First Time in 36 Months

Nigeria’s manufacturing sector declined for the first time in 36 months in May, according to the latest report from the Central Bank of Nigeria.

In the report released on Friday, the apex bank said the manufacturing Purchasing Managers’ Index (PMI) stood at 42.4 index points in May. The first contraction in 36 months and highlighted the extent of the damage done by COVID-19 in the sector.

According to the CBN, only electrical equipment subsector recorded growth in the month of May, while the remaining 13 subsectors reported declines in the following order cement; petroleum & coal products; printing & related support activities; furniture & related products; textile, apparel, leather and footwear; paper products; fabricated metal products; food, beverage & tobacco products; chemical & pharmaceutical products; transportation equipment; plastics & rubber products; nonmetallic mineral products; appliances and components and primary metal.

Also, production level declined for the first time in 37 months as all businesses grounded operations due to the COVID-19 lockdown and disruption in the global supply chain. Out of the 14 subsectors surveyed in the month, only one reported growth while four remained unchanged with nine recording declines.

Similarly, demand in the sector contracted in the sector after 36 months of consecutive months of expansion. Only three subsectors recorded growth in demand in the month of May while two subsectors were unchanged with nine declining.

The manufacturing sector created the lowest job in recent years in May as coronavirus pandemic disrupted operations and crippled businesses. The sector’s employment gauge stood at 24.5 index points in May, indicating a broad-based decline with 13 subsectors recording lower employment level and just one subsector recruiting during the month.