July PMI: Nigeria records 13 straight month of economic contraction, says CBN 

The galloping inflation and the forex volatility that have kept costs high have continued to drag the country’s economic activities down as the July 2024 composite purchasing managers index (PMI) stood at 49.7 points indicating contraction in economic activities for the thirteenth straight month.

This is contained in the July PMI report of the Central Bank of Nigeria (CBN), released yesterday.

The CBN, however, said that the index shows improvement compared to the 48.8 points recorded in the previous month. It noted that Output Level, Suppliers’ Delivery Time and Stock of Inventory expanded while New Orders and Employment contracted at a slower rate compared to the levels recorded in the previous month.

The PMI which measures the performance of business activities, is based on the change in different aspects of respondents’ business activities.

An index above 50.0 points indicates an expansion in business activities while below 50.0 points indicates a contraction in business activities.

The sectoral breakdown shows that the Services Sector recorded expansion for the second consecutive month while the Industry and Agricultural Sectors registered slower contraction when compared to the level recorded in the previous month.

Within the Industry Sector, the report said, the Manufacturing, Construction and Mining and Quarrying; Electricity, Gas and Water Supply Subsectors all recorded contractions in the review month.

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According to the report, 25 subsectors reported a decline in new orders with pharmaceutical products reporting the highest level of decline.

Nine subsectors reported increased levels of New orders in July but cement and Forestry remained unchanged, the index shows.

Eighteen sectors out of the 25 sectors reported a contraction in employment levels with printing activities recording the highest decline in July while the Petroleum and Coal subsectors had the highest employment levels.

He said, “At 48.7 index points, the composite employment level indicated contraction in July 2024 for the seventh consecutive month.

“The index improved in July 2024 when compared to the 48.3 points in June 2024.”

Nigeria has been facing a consistently rising inflation and unstable exchange rate that has left many businesses in comatose. While many manufacturing companies have already shut down others have scaled down their operations as they are finding it difficult to dispose of their products because of high costs resulting in low patronage.