Manufacturing sector reports sluggish growth in May

The manufacturing sector Purchasing Managers’ Index (PMI) stood at 56.5 index points in the month of May, indicating a sluggish expansion in the sector for the fourteenth consecutive month.

The index, when compared to the previous month, grew at a slower rate, depreciating by 0.4 index points from 56.9 index points in April, a PMI Survey Report by the Central Bank of Nigeria (CBN) released on Thursday has shown.

The PMI is an indicator of the economic health for manufacturing and services sectors.

The Manufacturing and Non-Manufacturing PMI Report on businesses is based on survey responses, indicating the changes in the level of business activities in the current month compared with the preceding month.

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The PMI report shows that 10 out of 14 subsectors captured under the survey reported growth in the review month.

The subsectors include: Petroleum & coal products; paper products; plastics & rubber products; electrical equipment; food, beverage & tobacco products; cement; chemical & pharmaceutical products; primary metal; printing & related support activities; and textile, apparel, leather & footwear.

On the other hand, the transportation equipment; fabricated metal products; nonmetallic mineral products; and furniture & related products subsectors declined in the review month.

New orders, which stood at 54.9 points, and raw materials inventories at 58.7 points grew at a slower rate, while production level, which stood at 58.8 points, supplier delivery time at 57.5 points and employment level at 55.2 points, all grew at a faster rate in May, 2018.

Also, the composite PMI for the Non-manufacturing sector stood at 57.3 points in May 2018, indicating expansion in the Non-manufacturing PMI for the thirteenth consecutive month. The index grew at a slower rate when compared to that in April 2018.

Business activity, new orders, and inventories in the non-manucfacturing sector grew at a slower rate; while employment grew at a faster rate in the review month.

The CBN had again in the last Monetary Policy Committee meeting retained its rates in a bid to further ensure stability in the economy.

The apex bank had kept the rates on hold since July 2016 to contained rising inflationary trend and improve the economic wellness of the nation.

By Oluwasegun Olakoyenikan…

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