Industrial sector PMI dips in August as inflation bites harder

The Industry Sector Purchasing Managers Index (PMI) contracted for the seventh consecutive time, recording 49.2 points in August, according to the August 2024 PMI report by the Central Bank of Nigeria (CBN).

The report, which shows that businesses recorded their first expansion in 13 consecutive months, stated that the PMI in August 2024 stood at 50.2 index points, indicating an expansion in economic activities for the first time after 13 consecutive months of contraction.

The 49.2 PMI recorded by the industry sector represents an improvement from the contractionary position observed since March 2024.

According to the report, this suggests that while the sector continues to experience contraction, there has been a gradual recovery in industrial activities over the past few months.

Analysis of the sub-sectors shows that Mining, Quarrying, Electricity, Gas, and Water Supply, and Construction sub-sectors registered expansions, while the Manufacturing sub-sector declined in August 2024.

Among the 17 sub-sectors surveyed, nine recorded contractions, while the remaining eight indicated expansion.

The sub-sector with the highest contraction, according to the report, was transportation equipment, whereas primary metal recorded the highest expansion.

The stock of raw materials is growing at 51.3 points, while output, new orders, and employment are declining at 49.2, 48.8, and 47.5 points, respectively.

The Suppliers’ Delivery Time Index is stationary at 50.0 points.

The Industry Production Index marginally dipped to 49.5 points, indicating a contraction in production activities in the month of August 2024.

The report says seven sub-sectors reported declines in production during the review month, with transportation equipment reporting the highest contraction, while fabricated metal products and electricity, gas, steam, and air conditioning supply sub-sectors were stationary. The remaining eight sub-sectors registered growth in production, with primary metal recording the highest growth.

The sectoral breakdown shows that the Services Sector recorded expansion for the third consecutive month, while the Agricultural Sector registered expansion for the first time in months.

The Services Sector Level of New Orders Index indicated expansion at 51.4 points, implying that the level of incoming orders increased in the review month. Eight sub-sectors reported growth, while the remaining six sub-sectors reported contraction.

Among the eight sub-sectors reporting growth, the repair, maintenance/washing of motor vehicles sub-sector had the highest growth, while real estate, rental, and leasing had the highest decline.