Manufacturing PMI Stands at 57.1% In August 2018 from 56.8% in July 2018

Friday, August 31,2018 /04.50 PM /CBN

Introduction

TheAugust 2018 PMI survey was conducted by the Statistics Department of theCentral Bank of Nigeria during the period August 9-17, 2018. The respondentswere purchasing and supply executives of manufacturing and non-manufacturingorganizations in all 36 states in Nigeria and the Federal Capital Territory(FCT) (Fig. 1). The Bank makes no representation regarding the individualcompanies, other than the information they have provided. The data containedherein further provides input for policy decisions.

Data and Method of Presentation

TheManufacturing and Non-Manufacturing PMI Report on businesses is based on surveyresponses, indicating the changes in the level of business activities in thecurrent month compared with the preceding month. For each of the indicatorsmeasured, this report shows the diffusion index of the responses.

Thediffusion index is computed as the percentage of responses with positive changeplus half of the percentage of those reporting no change, except for supplierdelivery time, which is computed as the percentage of responses with negativechange plus half of the percentage of those reporting no change. The compositePMI for the manufacturing sector is computed as the weighted average of fivediffusion indices, namely: production level, level of new orders, suppliers’delivery time, employment level and raw materials inventory/work in progress,with assigned weights of 25%, 30%, 15%, 10% and 20%, respectively.

Thecomposite PMI for the non-manufacturing sector is computed from four diffusionindices, namely: business activity, level of new orders, employment level andraw materials inventory, with equal weights of 25% each. A composite PMI above50 points indicates that the manufacturing/non-manufacturing economy isgenerally expanding, 50 points indicates no change and below 50 pointsindicates that it is generally contracting.

Thesubsectors reporting growth are listed in the order of highest to lowestgrowth, while those reporting contraction are listed in the order of thehighest to the lowest contraction.

Manufacturing PMI Report

TheManufacturing PMI in the month of August stood at 57.1 index points, indicatingexpansion in the manufacturing sector for the seventeenth consecutive month(Fig. 3 and Table 1).

Theindex however grew at a faster rate when compared to the index in the previousmonth. Of the 14 subsectors surveyed, 13 reported growth in the review month inthe following order: electrical equipment; non-metallic mineral products;cement; furniture & related products; plastics & rubber products;textile, apparel, leather & footwear; petroleum & coal products;chemical & pharmaceutical products; paper products; fabricated metalproducts; printing & related support activities; food, beverage &tobacco products and primary metal. The transportation equipment subsectordeclined in the review month.

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Production Level

At59.3 points, the production level index for the manufacturing sector grew forthe eighteenth consecutive month in August 2018. The index indicated a fastergrowth in the current month, when compared to its level in the preceding month.Thirteen of the 14 manufacturing subsectors recorded increases in productionlevel, while 1 declined (Fig. 4 and Table 2).

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New Orders

At56.9 points, the new orders index grew for the seventeenth consecutive month,indicating increase in new orders in August 2018. Eleven subsectors reportedgrowth, 1 remained unchanged, while 2 contracted in the review month (Fig. 5and Table 3).

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