Economic indices fall in January, says CBN

The nation’s economic indicators from manufacturing orders, raw material inventories, supplier delivery time and employment level heralded the first month of the year with negative records.

Besides, the general record of business activities declined after nine consecutive months of expansion to 46.2 points in January, 2016 from 55.9 points in the preceding month.

Of the 18 non-manufacturing sub-sectors, 12 of them reported decline in January, led by the utilities; public administration; construction; arts, entertainment and recreation; real estate, rental and leasing; and accommodation and food services.

Others were the information and communication; management of companies; wholesale trade; agriculture; and repair, maintenance/washing of motor vehicle and electricity, gas, steam and air conditioning supply.

Already, the nose-diving profile of the indices contained in the Purchasing Managers Index (PMI), a monthly report of the Central Bank of Nigeria (CBN), has been attributed to the drop in seasonal demand after the festive period in December, as well as the challenge of accessing foreign exchange by manufacturers.

There have been reports that the current difficulties in accessing foreign exchange by manufacturers have led to under-utilisation of capacity and revenue shortfalls, with some companies laying off workers, while others barred employment.

Specifically, the manufacturing index declined to 47.2 per cent in January 2016, from 51.2 per cent in December, with 14 of its sub-sectors declining in the review month while only paper products, and petroleum and coal products reported expansion.

The sub-sectors are electrical equipment; appliances and components; transportation equipment; primary metal; printing and related support activities; plastics and rubber products; non-metallic mineral products; computer and electronic products; and chemical and pharmaceutical products.

Other were the textile, apparel, leather and footwear; fabricated metal products; furniture and related products; cement; and food, beverage and tobacco products.

The production level index also declined at 49.3 per cent, after four consecutive months of growth, with 10 of the 16 sub-sectors, declining during the review month, led by electrical equipment; appliances and components; primary metal; non-metallic mineral products; transportation equipment; plastics & rubber products; printing and related support activities; among others.

The New Orders Index registered 46.2 per cent in January, 2016, as 13 sub-sectors reported decrease in new orders after two months of expansion.

The decline was led by appliances and components; electrical equipment; transportation equipment; primary metal; printing and related support activities; non-metallic mineral products; computer and electronic products; and furniture and related products, among others.

On the other hand, three sub-sectors recorded growth in new orders, led by petroleum and coal products; paper products; and food, beverage and tobacco products, which is attributable to the fuel scarcity experienced earlier in the year and stock of household basics.

Consequently, employment index in the month fell to 46 percent, completing the 11th consecutive monthly decline and at a faster rate when compared with its level in December, 2015.

Of the 16 sub-sectors of PMI, 15 recorded decline, led by primary metal; plastics and rubber products; appliances and components; transportation equipment; printing and related support activities; computer and electronic products; textile, apparel, leather and footwear; chemical and pharmaceutical products; fabricated metal products; furniture and related products; petroleum and coal products; cement; food, beverage & tobacco products; paper products and non-metallic mineral products.

Only the electrical equipment sub-sector reported growth in the review month, perhaps, riding on the back of the festive season, when people are more likely to change their household appliances and fittings.

The raw materials inventory index declined to 45.8 per cent in the month under review, paring a three-month expansion, as 12 of the 16 sub-sectors reported lower raw materials inventories.

The composite index for non-manufacturing sector also declined after one month of expansion, as it dropped to 46.9 points from the 53.4 points registered in the preceding month.

Led by 13 of the 18 non-manufacturing sub-sectors, the index declined in the month of January mostly by the professional, scientific and technical services; educational services; agriculture; repair, maintenance/washing of motor vehicles; arts, entertainment and recreation; wholesale trade; accommodation and food services; information and communication; and real estate, rental and leasing.

Others were utilities; management of companies; construction and public administration, while the Water supply, sewage and waste management sub-sector reported no change.