CBN’s PMI fall continues despite 2.5bps rise to 49.4 points in October

Charles Abuede

• Non-manufacturing PMI still slower at 46.8 points

 The October 2020 PMI data released by the CBN shows a rise of 2.5 basis points to 49.4 index points from 46.9 index points recorded for September, a demonstration of an easing back constriction in the manufacturing sector for the sixth month, the recent PMI report published by the apex bank revealed.

From the published information, out of the 14 subsectors surveyed, six subsectors recorded growth (above the 50 per cent threshold) in the survey month in the following order: Electrical equipment, Transportation equipment, Printing & related support activities, Chemical & pharmaceutical products, Textile, apparel, leather & footwear and Cement.  

The remaining eight subsectors reported contractions in the following: Primary metal, Petroleum & coal products, Paper Products, Fabricated metal products, Furniture & related products, Non–metallic mineral products, Plastics & rubber products and Food, beverage & tobacco products.

Production Level

At 50.0 points, the production level files in October 2020 recorded a halt in contraction for the first time since May 2020 in the manufacturing. Of the 14 subsectors surveyed by the CBN, seven subsectors recorded expansion production level, one subsector kept up current level, while six subsectors recorded decreases in production for the month under review.

New Orders

The new order index expanded at 51.2 points from compression in the last month. Though four subsectors detailed growth in new orders, four subsectors were unchanged, while the other six subsectors recorded constrictions in October.

Supply Delivery Time

The manufacturing supplier delivery time index stood at 51.8 points in October 2020. This demonstrates that supplier conveyance time is quicker for the 6th continuous month. Under this index, only six of the 14 subsectors recorded an improvement in the supplier delivery time, five subsectors announced stationary level, while three subsectors recorded slowing delivery time.

Employment Level

Raw material Inventories

At 46.2 record points, the manufacturing sector inventories contracted for the seventh time in October 2020. Only two out of the 14 subsectors recorded growth in inventories, while the other 12 subsectors recorded lower crude material inventories in the survey month.

Non-Manufacturing PMI Report

PMI for the non-manufacturing area remained at 46.8 points in October 2020, demonstrating contractions in non-manufacturing PMI for the seventh successive month. Of the 17 sub-areas reported by the CBN, three subsectors reported growth in the following order: Electricity, gas, steam & air conditioning supply; Art, entertainment & recreation and Health care & social assistance.

Also, 11 subsectors reported declines in the following order: Management of companies; Utilities; Information & communication; Construction; Professional, scientific, & technical services; Repair, Maintenance/Washing of Motor Vehicle; Wholesale/Retail trade; Educational services; Transportation & Warehousing; Accommodation & food services and Real estate rental & leasing. Three subsectors: Agriculture; finance & insurance and Water supply, sewage & waste management were unchanged.

Business Activity

There was a decline for the 6th continuous month in the business activity to 48.7 points, demonstrating compression in non-producing business activities in October 2020. Three out of the 17 subsectors showed growth in five business activities (above the 50% threshold) in the survey month; while 11 subsectors recorded decreases in business activity and three subsectors were unchanged in October 2020.

New Orders

At 47.8 points, new order declined for the seventh time in October 2020. 6 of the 17 subsectors announced growth in new request (above 50%) in the survey month, one area showed  static level, while the remaining 10 subsectors recorded decreases in new requests in the audit month.

Employment Level

The work level Index for the non-producing area remained at 44.2 focuses, showing contraction in employment level in October 2020. Each of the 17 subsectors revealed a decrease in work level (below the 50% threshold) in the survey month.

Non-manufacturing Inventory

At 46.3 points, non-manufacturing inventory index declined for the seventh sequential month. Four subsectors reported growth in stock, two subsectors recorded unchanged inventories, while the remaining 11 subsectors recorded decreases in inventories in the review period.