Nigeria’s Manufacturing Sector Contracted in the Month of October

The latest report on Nigeria’s manufacturing sector showed activity in the sector contracted in the month of October.

The manufacturing Purchasing Managers’ Index stood at 49.4 index points, indicating a slowing sector when compared with the last five months.

In the report titled “Purchasing Managers Index (PMI) Survey for October 2020” and released by the Central Bank of Nigeria, a total of 14 subsectors were surveyed while only 6 subsectors recorded expansion above 50 percent threshold in the following order: Electrical equipment, Transportation equipment, Printing & related support activities, Chemical & pharmaceutical products, Textile, apparel, leather & footwear and Cement.

The remaining 8 subsectors contracted in the following order: Primary metal, Petroleum & coal products, Paper products, Fabricated metal products, Furniture & related products, Nonmetallic mineral products, Plastics & rubber products and Food, beverage & tobacco products.

However, the report shows production level picked up in October at 50 index points, suggesting that production in the sector has stopped declining. Out of the 14 subsectors surveyed 7 subsectors recorded expansion in production level, 1 subsector was unchanged while 6 subsectors recorded declines in production in October 2020.

Similarly, demands rose in the sector in October as businesses were looking to up inventories for the December holiday period. New orders index appreciated at 51.2 index points, up from contraction it posted in the month of September.

Four subsectors reported expansion in new orders, 4 subsectors were flat, while the remaining 6 contracted in the month.