By Francis Arinze Iloani
The Purchasing Manager’s Index (PMI) has shown that Nigeria’s manufacturing sector is still in crisis despite improvements being recorded in the economy.
Data sourced from the Central Bank of Nigeria (CBN) showed that the manufacturing PMI stood at 47.7 index points in March 2017, indicating declines in the manufacturing sector for the third consecutive month.
The PMI is an indicator of the economic health of the manufacturing sector and it is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding: 50 points indicates no change and below 50 points indicates that it is generally declining.
Both the recent real GDP and inflation statistics released separately by the National Bureau of Statistics have shown marginal improvements in the health of the overall nation’s economy but improvement in the manufacturing sector is still low.
The PMI shows that production level is expanding, new orders are declining at a slower rate, supplier delivery time is improving from worsening condition, employment level is declining at a slower rate, and raw material inventories are declining at a slower rate.
Analysis showed that the production level index for manufacturing sector expanded in March 2017 to stand at 50.8 points