Manufacturing PMI, Employment Level Contract In June — CBN
The Central Bank of Nigeria (CBN) survey has shown that the Manufacturing and Non manufacturing Purchasing Managers Index (PMI), and employment level in the country dropped this month as firms expressed greater confidence in the macro economy by July, 2020.
The CBN PMI Survey Report released yesterday showed that the Manufacturing PMI in the month of June 2020 stood at 41.1 index points, indicating contraction in the manufacturing sector for the second time.
It noted that out of the 14 surveyed subsectors, 5 subsectors reported growth (above 50 percent threshold).
It stated:” Of the 14 surveyed subsectors, 5 subsectors reported growth (above 50 percent threshold) in the following order: electrical equipment; cement; petroleum & coal products; transportation equipment and paper products.
“However, the remaining 9 subsectors reported declines in the following order printing & related support activities; textile, apparel, leather & footwear; primary metal; plastics & rubber products; non metallic mineral products; fabricated metal products; food, beverage & tobacco products; chemical & pharmaceutical products and furniture & related products.”
The report also noted that the PMI for the non manufacturing sector contracted for the third consecutive month to 35.7 points in June 2020 as all the sub-sectors surveyed recorded declines.
The CBN said that the employment level index in the manufacturing and non manufacturing sector dropped in June to 38.8 and 37.4 points respectively as 19 out of the 31 sub-sectors surveyed recorded low employment level.
Meanwhile, in its Business Expectation Survey Report for June, 2020, the apex bank noted that at -24.3 index points, the overall confidence index (CI) showed respondents’ pessimism on the overall macro economy in the month of June.
However, respondents were optimistic in their outlook for July with a confidence index of 31.8 points and in the overall business outlook for August and December 2020 with confidence at 47.4 and 67.8 index points, respectively.
They identified insufficient power supply, competition, high interest rate, financial problems, unfavourable economic climate, unclear economic laws, insufficient demand, unfavourable political climate, access to credit and lack of equipment as major factors constraining business activities in June.
The report showed that firms expect the naira to depreciate this month but appreciate in the next 6 months, as their confidence indices stood at -15.7 and 46.6 index points, respectively.
Firms also projected further rise in the average inflation rate in the next six months and the next twelve months to stand at 12.45 and 12.83 percent, respectively.
