Nigeria’s Non-Manufacturing Sector Contracts in December
The Central Bank of Nigeria (CBN) has reported that Nigeria’s non-manufacturing sector which contributed 91 percent to the economy contracted in the month of December for the ninth consecutive months.
According to the report, the non-manufacturing sector’s Purchasing Managers Index stood at 45.7 index points in December 2020.
In the report released last week, the apex bank said out of the 17 subsectors surveyed during the month under review, only 5 subsectors reported growth in the following order: Arts, Entertainment & Recreation; Water supply, sewage & waste management; Electricity, gas, steam & air conditioning supply; Educational services and Professional, scientific & technical services.
However, twelve subsectors reported contractions in the following order: Management of companies; Utilities; Transportation & warehousing; Real estate rental & leasing; Construction; Finance & insurance; Agriculture; Wholesale/Retail trade; Information & communication; Repair, Maintenance/Washing Of Motor Vehicles…; Health care & social assistance and Accommodation & food services.
Similarly, business activity remained weak at 46.9 index points as only 6 of the 17 subsectors reported expansion in business activities above the 50 percent threshold while 10 subsectors posted contraction with just information and communication remaining unchanged.
Demands in the non-manufacturing sector also contracted at 45.1 index points as businesses continue to struggle with the plunge in productivity and rising economic uncertainties. This is one of the reasons the Nigerian Stock Exchange has witnessed 40 percent profit in 2020 alone as investors and businesses now prefer to dump the money in the capital market against the real sector encompassed with high risk and low activities.
As expected, job creation in the sector remained weak. The non-manufacturing employment index stood at 45.1 index points in December, below the 50 percent threshold that separates expansion from contraction.
“Only Electricity, gas, steam & air conditioning supply subsector reported growth in employment level above 50% threshold, 2 subsectors reported stationary level, while the remaining 14 subsectors recorded decline in
new orders in the review month,” the report stated.