Friday, July 31,2020
For the third consecutive month, manufacturing activities in Nigeria contracted in July despite recording a higher point than in the previous month of June.
According to the Purchasing Managers Index (PMI) of the Central Bank of Nigeria (CBN) published on Thursday, the reading for this month was still below 50 index points.
A composite PMI above 50 index points indicates the economy is expanding, 50 points indicate non-change, while below 50 points indicate the economy is generally contracting.
According to the PMI survey report, the manufacturing sector posted a PMI of 44.9 index points in July in contrast to 44.1 index points in June, indicating contraction in the manufacturing sector for the third consecutive month.
Similarly, the report showed that the non-manufacturing PMI stood at 43.3 index points, translating to a contraction in the non-manufacturing sector for the fourth consecutive month.
It was, however, noted that out of the 31 surveyed subsectors in the manufacturing sector in the month under review, 6 sub-sectors reported growth (above 50 per cent threshold).
The report stated that: “The manufacturing PMI in the month of July stood at 44.9 index points, indicating contraction in the manufacturing sector for the third consecutive month.
“Of the 14 surveyed subsectors, transportation equipment subsector reported growth (above 50 per cent threshold) in the review month while nonmetallic mineral products sector reported no change.
“The non-manufacturing sector PMI stood at 43.3 points in July 2020, indicating contraction in the non-manufacturing sector for the fourth consecutive month.
“Of the 17 surveyed subsectors, 2 subsectors: arts, entertainment & recreation and transportation & warehousing reported growth (above 50 per cent threshold) in the review month.”
The year has been plagued with the global COVID-19 pandemic, which caused the world economy to crumble because of the restrictions placed on movements across nations.
In Nigeria, the federal government declared total lockdown on three major economic cities of the country; Lagos, Ogun and Abuja for about six weeks. Many businesses were shut during this period because of this.
Economic activities only began to come up fully this month, including the aviation sector. However, churches and schools are still closed.