Nigeria's Manufacturing Purchasing Managers' Index Drops to 54.6
IMAGE: FBN Capital »
The latest report for the manufacturing Purchasing Managers’ Index (PMI) for Nigeria compiled by the FBN Capital in partnership with NOI Polls showed a marginal decline from 56.2 in July to 54.6 in August 2014.
To compile the PMI, which takes the temperature of the sector, according to FBN Capital, a selection of companies were asked their view each month on core variables in their business.
According to the most used methodology, 50 marks a neutral reading and anything higher suggests that the manufacturing economy is expanding.
The five variables are output, employment, new orders, delivery times from suppliers and stocks of purchases. They have equal weightings in our index, and respondents are asked to adjust their replies for seasonal factors.
The reading of 44 was sharply down on the previous month’s 53, with the decline across all sizes of company. The holiday season in August could have been a factor, with fewer employees at work and lower demand as management scaled down production. Readings for output, according to a report by Worldstage, were the most volatile of the five.
The Manufacturers’ Association of Nigeria (MAN) had reported an increase in the sector’s capacity utilisation to 52.7 per cent in the second half of 2013 from 46.6 per cent in the comparable period of 2012.
In terms of the employment sub-index, the reading reduced slightly from 57 to 55. By far the largest number of respondents (58%) reported no change. Among large companies alone there was a pick-up in employment.
A recent survey from MAN reportedly showed the creation of 1.58 million jobs by its members in 2013, compared with 1.07 million the previous year. Non-metallic mineral products, which include cement and ceramics, accounted for 1.18 million of the new jobs. Food, beverages and tobacco created an additional 49,000 new jobs in the year, and textiles, apparel and footwear 54,000.
Article Credit: Thisdaylive