Nigeria’s economic activities endure 13th consecutive month of decline as PMI falls to 49.7 in July 

Business a.m.

The Central Bank of Nigeria (CBN) revealed that the Purchasing Managers Index (PMI) for July 2024 recorded a value of 49.7, indicating a continuous contraction of the country’s economic activity for 13 consecutive months. 

The PMI is a widely used indicator of economic health and can provide valuable insights into the current state of a country’s economy, as well as possible trends and future prospects. It is computed based on responses regarding the direction of change in different aspects of respondents’ business activities.

Despite the continuous contraction of economic activity, CBN highlighted a slight improvement in the PMI index, which stood at 49.7 points in July 2024, compared to 48.8 points recorded in June 2024.  

While this signals a slight uptick in economic activity, it is important to note that the PMI remains below the 50-point threshold which indicates a contraction.

According to the CBN, an index above 50.0 points indicates an expansion in business activities while below 50.0 points indicates a contraction in business activities.

The PMI report highlighted that the output level, suppliers’ delivery time, and stock of inventory expanded in July 2024, indicating growth in these areas. However, the contraction of new orders and employment, although at a slower rate compared to the previous month, suggests a lingering weakness in these sectors of the economy.

The PMI report further revealed that the services sector expanded for the second consecutive month, providing some respite in an otherwise contracting economy. 

On the other hand, the industry and agricultural sectors registered a slower rate of contraction in July 2024, compared to the previous month. 

The PMI report showed that the industry sector continued to contract in July 2024, with its three sub-sectors experiencing similar trends. 

Specifically, the manufacturing, construction, and mining & quarrying sub-sectors all registered contractions in the review month, pointing to a persisting weakness in these crucial areas of the economy. Furthermore, the electricity, gas & water supply sub-sector also showed a contraction, a reflection of the ongoing challenges in Nigeria’s electricity and utility sectors.

CBN noted that the survey for the July 2024 PMI report was conducted between July 15th and 19th, 2024, with the primary aim of determining the overall direction of economic activity in Nigeria during the month.