The July Purchasing Managers’ Index (PMI) data from the Central Bank of Nigeria (CBN) shows that economic activity is still contracting, which is the 13th consecutive month of fall since June 2023.
The Purchasing Managers’ Index (PMI) for the month was 49.7 points, which was an increase from June’s reading of 48.8 points but still indicated a decrease in economic activity for the month, according to the report.
The PMI is calculated based on responses about the direction of change in various aspects of respondents’ business activities. An index above 50.0 points signals an expansion in business activities, while an index below 50.0 points indicates a contraction. An index of exactly 50.0 points reflects no change in business activity.
The report noted that the increase in PMI for the month was on the back of expansion in output level, suppliers’ delivery time and stock of inventory expanded while new orders and employment contracted during the period.
It stated, “In July 2024, the composite PMI stood at 49.7 points indicating contraction in economic activities for the thirteenth consecutive month. However, the index shows improvement compared to the 48.8 points recorded in the previous month. Furthermore, Output Level, Suppliers’ Delivery Time and Stock of Inventory expanded. New Orders and Employment contracted at a slower rate compared to the levels recorded in the previous month.”
The report indicated that the Services Sector experienced expansion for the second consecutive month, while the Industry and Agricultural Sectors saw a slower rate of contraction compared to the previous month.
Within the Industry Sector, the Manufacturing, Construction, Mining & Quarrying, as well as the Electricity, Gas & Water Supply Subsectors, all recorded contractions during the review month.
The report for July 2024 indicated that the Industry Sector PMI, at 48.3 points, marked its sixth consecutive month of contraction. However, there was an improvement in industrial activities, as reflected in higher production levels and faster suppliers’ delivery times compared to June 2024.
The Manufacturing; Mining, Quarrying, Electricity, Gas, and Water Supply; and Construction subsectors all registered declines in July 2024.
Among the 17 subsectors surveyed, 11 recorded contractions, while the remaining six experienced expansion. The subsectors with the most significant contraction and expansion were Transportation Equipment and Furniture & Related Products, respectively.
The report indicated that the Services Sector index in July 2024, at 50.3 points, showed expansion for the second consecutive time since May 2023.
Growth was observed in Business Activity and Stock of Raw Materials Inventory, while the level of New Orders declined, and Employment levels remained unchanged during the review month. Of the 14 subsectors surveyed, eight recorded growth, while six reported declines.
The Motion Pictures, Cinema, Sound Recording, and Music Production subsector registered the highest expansion, while the Management of Companies subsector experienced the most significant contraction.
