Manufacturing sector in six-month slow growth, says CBN report

The nation’s economy may have started a journey into another recession with the Central Bank of Nigeria’s latest report showing that the manufacturing sector has been in contraction for two consecutive quarters.

Economists explain recession as a period of two consecutive quarters of negative gross domestic product, when reduced production and unemployment become pronounced.

Specifically, the new CBN report indicates that the Purchasing Managers Index for the manufacturing sector has recorded six months of contraction.

The statistics department of the CBN stated in its October Purchasing Managers Index survey report that the contraction started in May.

The report obtained by the Punch read in part, “The manufacturing PMI in the month of October stood at 49.4 index points, indicating slowing contraction in the manufacturing sector compared with the last five months.

“Of the 14 subsectors surveyed, six subsectors reported expansion (above 50 per cent threshold) in the review month in the following order: electrical equipment, transportation equipment, printing & related support activities, chemical & pharmaceutical products, textile, apparel, leather & footwear and cement.

“The remaining eight subsectors reported contraction in the following order: primary metal, petroleum & coal products, paper products, fabricated metal products, furniture & related products, non-metallic mineral products, plastics & rubber products and food, beverage & tobacco products.”

At 50.0 points, the production level index in October 2020 for the manufacturing sector indicated halting in contraction which commenced since May 2020.

Of the 14 subsectors surveyed, seven subsectors recorded expansion in production level, one subsector maintained current level, while six subsectors recorded a decline in production in October 2020.