Economic report records mixed transactions’ fortunes

Amid seeming heavy transactions in the month of December 2015, a record of economic activities in the period has shown a decline in majority of the indices.
 
The economic indicators, which remained mixed in December compared to November 2015, range from production and supply, raw material inventories to employment generation.

The Purchasing Managers Index (PMI), a monthly survey of the Central Bank of Nigeria (CBN), which revealed the development, is designed to show the prevailing direction and the scope of change in business activities in the economy.

PMI, is a mix of five indices- production level, new orders, supplier delivery time, employment level and raw materials inventory.

In December, while production level and new orders grew, though at slower rate, raw material inventories increased at faster rate, with supplier delivery time declining also at faster rate together with employment level.
 
The employment level index in December, at 47.5 per cent, indicated a decline in employment in the manufacturing sector, making it the 10th consecutive monthly fall.
 
Though the decline was rated as “slower rate”, when compared with the November record, further analysis showed that 11 sub-sectors in the manufacturing segment contributed to the negative report.
 
Leading the pack is the transportation equipment sub-sector, followed by fabricated metal products; printing and other related support activities; chemical and pharmaceutical products; and appliances and components.
 
Others were paper products; electrical equipment; furniture and related products; textile, apparel, leather and footwear; and food, beverage and tobacco product.
 
Their inability to increase and retain employment may not be unconnected with the foreign exchange issues, which has limited importation of most of these items.
 
The manufacturing index had remained flat at 51.2 per cent in December, the same rate in the previous month, but better that October report at 49.2 per cent.

Of the 16 manufacturing sub- sectors, only eight sub-sectors reported expansion in the review month, led by cement; petroleum and coal products; food, beverage and tobacco products; textile, apparel, leather and footwear; chemical and pharmaceutical products; plastics and rubber products; furniture and related products; and primary metal.

However, the remaining eight sub-sectors reported contraction, led by appliances and components; nonmetallic mineral products; transportation equipment; fabricated metal products; paper products; electrical equipment; computer and electronic products; and printing and related support activities.
 
At the production segment, there was a 55.4 per cent record, showing an increase in the month under review, but at slower pace, compared with the level in November.
 
Five out of 16 reported contractions in production during the month under review led by nonmetallic mineral products; appliances and components; paper products; fabricated metal products; and electrical equipment.

There was a decline in New Orders index, which registered 52.7 per cent in December, from 52.9 per cent in November, with nine sub-sectors out of 16 reporting increase.
 
At 45.2 per cent, the supplier delivery time index for manufacturing sub-sectors declined for the 11th consecutive month at a faster rate when compared with the level in November 2015 at 47.3 per cent, with 13 six sub-sectors leading the decline.
 
However, in the raw materials inventory index, it rose to 52.7 per cent from 52.2 per cent in November, with nine of the 16 sub-sectors reporting higher raw materials inventories.
 
In the non-manufacturing sector, business activity and new orders grew at faster rate, while level of employment remained unchanged and raw materials inventories rebounded.

With index rising to 53.4 points from 49.6 points in November, it returned to expansion, after breaking seventh consecutive months of growth in November.