Economy
Nigeria’s Manufacturing Activity Contracts in September Amid Weak Macro Fundamentals
Manufacturing Sector Contracts in September to 46.7 Index Points Amid Economic Uncertainties
Nigeria’s manufacturing sector contracted again in the month of September, according to the latest report from the Central Bank of Nigeria (CBN).
The Manufacturing Purchasing Managers’ Index that measures the healthiness of the sector revealed that activities contracted to 46.9 index points in the month of September. Below the 50 threshold that separates contraction from expansion.
The CBN report also stated that out of the 14 subsectors surveyed during the month under review, only 4 subsectors reported growth in the following orders: electrical equipment; transportation equipment; cement and nonmetallic mineral products. While the remaining subsectors reported declines in the following order: petroleum & coal products; primary metal; furniture & related products; printing & related support activities; food, beverage & tobacco products; textile, apparel, leather & footwear; chemical & pharmaceutical products; fabricated metal products and plastics & rubber products. Only the paper product subsector was described as stable.
Accordingly, production in the manufacturing sector stood at 47.3 index points in the month with activities expanding in just 5 subsectors out of the 14 subsectors surveyed. Eight of the subsectors contracted in production while activities in one subsector were unchanged.
Demand in the sector also contracted at 46.4 index points as demand dropped for the fifth consecutive month in September. Only six of the 14 subsectors surveyed recorded growth. The remaining eight declined.
Job creation in the sector declined with activities as the employment index stood at 44.1 index points, suggesting that businesses in the sector are not creating new jobs with plunging demands amid falling consumer spending.
Broad-based economic uncertainties continued to dictate productivity in Africa’s largest economy as a series of weak macro fundamentals, counterproductive government policies and COVID-19 negative impacts plunged business sentiment.