With the Central Bank of Nigeria (CBN) sustaining its foreign exchange intervention in the real sector for importation of key raw materials, the manufacturing sector’s raw materials inventory index grew for the third consecutive month to close at 52.3 points.
This is just as the Manufacturing Purchasing Managers’ Index (PMI) increased to 52.9 index points in June 2017, showing expansion in the manufacturing sector for the third consecutive month.
Since March the CBN has stepped up its sales of forex to importers, small and medium enterprises and retail (for invisibles). The consequences for the sector have been far greater availability of raw materials and naira appreciation on the parallel market, with the food and beverages segment being the main beneficiary.
According to latest PMI report by the Central Bank of Nigeria (CBN), the PMI is an indicator of the economic health of the manufacturing sector, and is based on five major indicators: new orders, inventory levels, production, supplier deliveries, and the employment environment.
A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally declining
The Director-General of the Manufacturers Association of Nigeria (MAN), Segun Kadiri commended the apex bank’s efforts in intervening to ensure that manufacturers access foreign exchange to import their raw materials, even as he sought the bank’s understanding in addressing certain gaps and demands that are yet to be met in some sub-sectors.
The latest PMI report showed that 12 of the 16 sub-sectors reported growth in the review month in the following order: computer & electronic products; paper products; plastics & rubber products; primary metal; transportation equipment; petroleum & coal products; appliances & components; textile, apparel, leather & footwear; furniture & related products; electrical equipment; food, beverage & tobacco products; and fabricated metal products.
On the other hand, four other sub-sectors declined in the order: non-metallic mineral products; cement; chemical & pharmaceutical products, and printing & related support activities.