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Purchasing Managers’ Index (PMI) December 2016 Report

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The Statistics Department, Central Bank of Nigeria conducts a monthly survey of purchasing and supply executives of manufacturing and non-manufacturing organizations in 13 locations in Nigeria: – two states in each of the six geo-political zones, and the Federal Capital Territory (FCT). The survey results are used to compute the monthly Purchasing Managers’ Index (PMI). The survey for this month was conducted December 13th to 20th, 2016 with a total of 1,740 responses received from a sample of 1,950 respondents, representing a response rate of 89.2 per cent. The Bank makes no representation regarding the individual companies, other than that stated by the respondents. The data contained herein further provides input for policy decisions.

 

Data and Method of Presentation

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on data compiled from purchasing and supply executives. Survey responses indicate whether there is change or no change in the level of business activities in the current month compared with the previous month. For each of the indicators measured, this report shows the diffusion index of the responses. The diffusion index is computed as the percent of positive responses plus one-half of the percent of those reporting no change. The composite PMI is then computed as the weighted average of five diffusion indices for manufacturing sector: production level, new orders, supplier delivery time, employment level and raw materials inventory, with assigned weights of 25 per cent, 30 per cent, 15 per cent, 10 per cent and 20 per cent, respectively. The composite PMI for non-manufacturing sector is computed from four diffusion indices: business activity, new orders, employment level and raw materials inventory, with equal weights of 25 per cent each.

A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally declining. The sub-sectors reporting growth are listed in the order of highest to lowest growth. For the sub-sectors reporting contraction/decline, they are listed in the order of the highest to the lowest decline.

 

Manufacturing PMI Report

Production level, new orders, and raw material inventories expanding from contraction; employment level declining slower; and supplier delivery time worsening from improving December 2016.The Manufacturing PMI stood at 52.0 index points in December 2016, indicating expansion in the manufacturing sector during the review period. The index had recorded declining in the preceding eleven months. Eight of the 16 sub-sectors surveyed recorded expansion in the review month in the following order: cement; food, beverage and tobacco products; textile, apparel, leather and footwear; plastics and rubber products; paper products; appliances and components; chemical and pharmaceutical products; and furniture and related products. The fabricated metal products sub-sector remained unchanged, while the remaining seven subsectors declined in the order: computer and electronic products; electrical equipment; primary metal; transportation equipment; petroleum and coal products; printing and related support activities; and non-metallic mineral products.

 

Manufacturing Production Level

At 57.6 index points, the production level index for manufacturing sector indicated the sector expanded in the review period, compared to the decline recorded in the preceding eleven months. Five manufacturing sub-sectors recorded growth in production level during the review month in the following order: cement; food, beverage and tobacco products; electrical equipment; plastics and rubber products; and textile, apparel, leather and footwear. The appliances and components sub-sector remained unchanged, while the remaining ten sub-sectors declined in the review period in the order: primary metal; petroleum and coal products; computer and electronic products; transportation equipment; furniture and related products; fabricated metal products; non-metallic mineral products; paper products; chemical & pharmaceutical products; and printing and related support activities.

 

Manufacturing New Orders

At 51.8 points, the new orders index showed expansion in new orders after eleven months of contraction. It stood at 45.1 in November 2016. The five sub-sectors that recorded expansion in new orders were: cement; food, beverage and tobacco products; textile, apparel, leather and footwear; paper products; and fabricated metal products. The plastics and rubber products sub-sector remained unchanged, while the remaining ten sub-sectors declined in the order: primary metal; electrical equipment; transportation equipment; appliances and components; petroleum and coal products; printing and related support activities; computer and electronic products; non-metallic mineral products; furniture and related products; and chemical and pharmaceutical products.

 Manufacturing Supplier Delivery Time

At 47.9 index points, the supplier delivery time for manufacturing sub-sectors contracted in the month of December 2016, after nine consecutive periods of expansion. Nine sub-sectors recorded worsening suppliers’ delivery time in the following order: transportation equipment; food, beverage and tobacco products; cement; textile, apparel, leather and footwear; paper products; printing and related support activities; chemical and pharmaceutical products; plastics and rubber products; and non-metallic mineral products. The computer and electronic products and electrical equipment sub-sectors remained unchanged, while the appliances and components; primary metal; furniture and related products; petroleum and coal products; and fabricated metal products sub-sectors recorded improving delivery time in December.

 

Manufacturing Employment Level

Employment level index in the month of December 2016 stood at 48.6 points, indicating declines in employment level for the twenty-second consecutive month. However, the index shows a slowing contraction in manufacturing employment when compared with the level in the preceding month. Of the sixteen sub-sectors, nine recorded contraction in employment in the following order: computer and electronic products; electrical equipment; appliances and components; printing and related support activities; furniture and related products; chemical and pharmaceutical products; primary metal; fabricated metal products; and non-metallic mineral products. The paper products; petroleum and coal products; and transportation equipment sub-sectors remained unchanged, while the cement; plastics and rubber products; food, beverage and tobacco products; and textile, apparel, leather and footwear sub-sectors recorded expansion during the review period.

 

Manufacturing Raw Materials Inventory

At 51.6 index points, the index shows an expansion in raw materials inventory in the review month, after declining for eleven consecutive months. Of the sixteen sub-sectors, eight recorded expansion in raw materials inventories in the order: cement; food, beverage and tobacco products; textile, apparel, leather and footwear; plastics and rubber products; chemical and pharmaceutical products; transportation equipment; appliances and components; and paper products. The remaining eight sub-sectors recorded decline in inventories in the order: petroleum and coal products; computer and electronic products; electrical equipment; primary metal; non-metallic mineral products; furniture and related products; fabricated metal products; and printing and related support activities. Business activity, new orders, employment level and raw materials inventories declining at a slower rate in December 2016. The composite PMI for the non-manufacturing sector declined for the 12th consecutive month. The index stood at 47.1 points, indicating a slowing contraction when compared to that in November 2016. Of the 18 non-manufacturing sub-sectors, 10 recorded contraction in the following order: construction; public administration; professional, scientific, technical services; information and communication; repair, maintenance/washing of motor vehicles; accommodation and food services; health care and social assistance; finance and insurance; wholesale/retail trade; and electricity, gas, steam and air conditioning supply. The remaining eight subsectors recorded expansion in the order: utilities; educational services; agriculture; transportation and warehousing; management of companies; arts, entertainment and recreation; water supply, sewage and waste management; and real estate, rental and leasing.

Non-Manufacturing Business Activity

At 48.2 index points, business activity declined for the twelfth consecutive month but at a slower rate in December 2016. Nine sub-sectors recorded contraction in the following order: construction; public administration; information and communication; professional, scientific, and technical services; repair, maintenance/washing of motor vehicles; finance and insurance; accommodation and food services; electricity, gas, steam and air conditioning supply; and health care and social assistance. The remaining nine sub-sectors recorded expansion in the order: utilities; educational services; agriculture; transportation & warehousing; management of companies; water supply, sewage and waste management; real estate, rental and leasing; arts, entertainment and recreation; and wholesale/retail trade.

 Non-Manufacturing New Orders

At 46.9 index points, new orders for non-manufacturing show a slowing contraction in December 2016. Of the eighteen sub-sectors, ten contracted in the following order: construction; public administration; professional, scientific, and technical services; information and communication; accommodation and food services; real estate, rental and leasing; electricity, gas, steam and air conditioning supply; health care and social assistance; transportation and warehousing; and repair, maintenance/washing of motor vehicles. The wholesale/retail trade sub-sector remained unchanged, while the remaining seven sub-sectors recorded expansion in the order: arts, entertainment and recreation; management of companies; utilities; agriculture; educational services; finance and insurance; and water supply, sewage and waste management.

Non-Manufacturing Employment Level

The employment level Index for non-manufacturing declined for the twelfth consecutive month in December 2016. At 43.8 points, the index declined at a slower rate when compared with the 40.2 points recorded in November 2016. Fourteen sub-sectors recorded contraction in employment level in the following order: construction; professional, scientific, and technical services; public administration; arts, entertainment and recreation; wholesale/retail trade; information and communication; finance and insurance; repair, maintenance/washing of motor vehicles; health care and social assistance; accommodation and food services; agriculture; water supply, sewage and waste management; real estate, rental and leasing; and electricity, gas, steam and air conditioning supply. The educational services and utilities sub-sectors remained unchanged, while the management of companies; and transportation and warehousing sub-sectors employment level expanded in the review month.

 Non-Manufacturing Inventories/Work in Progress

Non-manufacturing inventories/work in progress index stood at 49.5 points in the review month, indicating a slower decline when compared with the 45.5 points recorded in November 2016. Ten sub-sectors recorded contraction in inventories in the following order: construction; public administration; professional, scientific, and technical services; information and communication; repair, maintenance/washing of motor vehicles; management of companies; accommodation and food services; finance and insurance; health care and social assistance; and wholesale/retail trade. The remaining eight sub-sectors recorded expansion in inventories in the following order: utilities; transportation and warehousing; educational services; agriculture; real estate, rental and leasing; electricity, gas, steam and air conditioning supply; water supply, sewage and waste management and arts, entertainment and recreation.

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