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Released Manufacturing Purchasing Managers’ Index ebbs, stood at 44.6 in Feb.

Going by the latest Manufacturing Purchasing Managers’ Index (PMI) released by the Central Bank of Nigeria (CBN), 14 out of 16 sub-sectors reportedly declined in the month of February.

The index ebbed to 44.6 index points in February 2017, a sign of serious stress and squeeze in manufacturing sector for two consecutive months after a momentary expansion in December 2016.

PMI is an indicator of the economic health of the manufacturing sector and its variables are based on five major indicators including new orders, inventory levels, production, supplier deliveries and the employment environment.

The CBN report showed a trend of decline beginning from transportation equipment; paper products; electrical equipment; printing & related support activities; fabricated metal products; chemical & pharmaceutical products; furniture & related products; cement; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear; computer & electronic products; nonmetallic mineral products and primary metal.

However, the appliances & components and food, beverage & tobacco products sub-sectors reported expansion in the review period.

Accordingly, and in response to the dropped PMI, the production level index for manufacturing sector also nosedived within the month under review.

February index stood at 45.2 points which represents a significant decline in production level when compared to the 51.3 points in the previous month.

The CBN report also revealed that “12 manufacturing sub-sectors recorded declines in production level during the review month in the following order: electrical equipment; paper products; transportation equipment; chemical & pharmaceutical products; plastics & rubber products; furniture & related products; fabricated metal products; printing & related support activities; computer & electronic products; primary metal; textile, apparel, leather & footwear and cement. The petroleum & coal products sub-sector remained unchanged, while the appliances & components; food, beverage & tobacco products and nonmetallic mineral products recorded growth in production”.

It added that the major reason for the drop can be traced to forex frustration which analysts say has started a gradual recovery as CBN pumps forex in to the economy via banks.

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