Nigeria’s industrial sector contracts for the ninth consecutive month in September- CBN report

Activities in Nigeria’s industrial sector contracted again in September- marking the ninth consecutive decline in 2024 with PMI at 49.7.

This is according to the Purchasing Managers’ Index (PMI) published by the Central Bank of Nigeria (CBN) where business activities in the month under review composite PMI reached 50.7 in the month indicating an expansion in economic activities for the second consecutive month.

The sectoral breakdown of the September PMI reveals that the Services Sector expanded for the fourth consecutive month, while the Agricultural Sector saw its second consecutive month of growth.

Although the Industry Sector remained in contraction, the rate of contraction slowed compared to what was recorded in August 2024.

Nigeria’s industrial sector has been in contraction since January 2024 but in recent months, there has been an uptick in activities in the sector.

The report noted that 10 of the 17 subsectors under the industrial sector recorded expansion during the month while three remain unchanged and four recorded contraction.

The report states, “In September 2024, the Industry Sector PMI stood at 49.7 points. Although the sector contracted, the figure represents an improvement compared to the level in the previous month.”

“Analysis of the aggregate sector shows that the Mining, Quarrying, Electricity, Gas, and Water Supply; and Construction subsectors registered expansions, while the Manufacturing subsector declined in September 2024.”

“Among the 17 subsectors surveyed, four recorded contractions, three remained unchanged, while the remaining 10 indicated expansion. The subsector with the highest contraction was Paper Product, whereas Cement recorded the highest expansion.”

Additionally, the CBN PMI for the month indicated that the Stock of Output and Raw Materials indices in the Industry Sector grew, reaching 50.7 and 51.7 points, respectively. However, New Orders and Employment declined, recording 49.9 and 48.2 points, respectively, while the Suppliers’ Delivery Time index slowed to 48.4 points in September 2024.

Employment in the industrial sector

In September 2024, the Industry Sector Employment index was recorded at 48.2 points, signaling a slower contraction in employment levels. Data from the PMI reveals that the employment indices iof the industrial sector has been in contraction since March 2024 but has gradually improved from a low of 45 in March, 2024.

Eight subsectors experienced a decline in employment, seven subsectors reported growth, while the Transportation Equipment and Water Supply, Sewerage & Waste Management subsectors maintained stable employment levels.

The report on employment in the sector corroborates the Nigeria Labour Force Participation report published by the National Bureau of Statistics (NBS) earlier last month where unemployment rate increased to 5.3% in the first quarter of the year.

SOURCE: NAIRAMETRICS