CBN PMI signals economic rebound after yearlong contraction
By Esther Agbo
The Nigerian economy saw a positive shift in August 2024, as the Purchasing Managers’ Index (PMI) released by the Central Bank of Nigeria (CBN) indicated economic expansion for the first time in over a year.
The PMI for August 2024 showed a composite score of 50.2 index points, signalling a recovery following 13 months of contraction.
The report stated, “The sectoral breakdown shows that the services sector recorded expansion for the third consecutive month, while the agricultural sector registered expansion for the first month. The industry sector, though contracted, registered a slower contraction when compared to the level recorded in the previous month.
“Among the 36 subsectors reviewed across the industry, services and agriculture sectors, 17 subsectors reported growth with primary metal reporting the highest growth during the review month, while the remaining 19 subsectors registered a decline with forestry reporting the highest decline.
“Output, new orders and stock of raw materials at 50.8, 50.5 and 51.3 points, respectively indicated growth. Suppliers’ Delivery Time is Stationary at 50.0 points, while Employment at 48.7 points registered a decline in August 2024.”
The CBN’s PMI survey, conducted between August 12 and 16, gathered insights from purchasing and supply executives across the industry, services, and agriculture sectors.
An index above 50.0 points indicates an expansion in business activities, while below 50.0 points indicates a contraction in business activities.
An index of 50.0 indicates a no-change situation.A closer look at the composite Employment index showed that at 48.7 index points in August, the contraction in employment level continued for the eighth consecutive.
According to the report, “This index, when compared to the level in July 2024, remained unchanged, indicating no significant change in employment during the period. 19 subsectors reported a contraction in employment level, with transportation equipment and forestry subsectors recording the highest decline in the review month.
“Six subsectors remained unchanged, while the remaining 11 subsectors reported increased Employment Levels with the Electrical Equipment subsector having the highest Employment index.”
In August, the CBN reintroduced key economic reports, including the PMI, business expectations survey, and inflation expectations report. The bank emphasised that these reports provide critical insights for stakeholders to gauge Nigeria’s economic performance in real-time.
