Economic activities in Nigeria have recorded a second consecutive month of contraction, as shown in the November 2024 Purchasing Managers Index (PMI) released by the Central Bank of Nigeria (CBN).
The composite PMI for the month stood at 48.9 index points, signalling a continued decline below the 50.0-point threshold, which separates economic expansion from contraction.
According to BusinessDay, the report highlighted that all components of the composite PMI showed declines, signalling a broad-based slowdown across multiple indicators. A closer look at the 36 sub-sectors assessed in the industry, services, and agriculture sectors revealed that only 14 sub-sectors reported growth in economic activities, with transportation equipment leading the growth. However, 22 subsectors registered declines, with transportation and warehousing recording the steepest drop during the review period.
Key metrics such as output, new orders, employment, and stock of raw materials recorded index points of 49.6, 48.1, 49.0, and 48.8, respectively. Each of these indicators fell below the 50.0-point mark, further confirming the contraction in economic activities. Additionally, the suppliers’ delivery time index declined to 49.1 points, indicating slower delivery times.
The CBN conducted the PMI survey from November 11 to November 15, 2024, gathering input from 1,900 respondents comprising purchasing and supply executives across the Industry, Services, and Agriculture Sectors. The survey assessed changes in respondents’ business activities, using a comprehensive methodology where an index above 50.0 indicates expansion, below 50.0 signals contraction, and exactly 50.0 represents no change.
Sectoral analysis revealed mixed performances. While the agriculture sector showed resilience, registering expansion in economic activities for the month, both the Industry and Services Sectors experienced contractions. The services sector, in particular, demonstrated a notable decline, reflecting pressures on consumer demand and business operations.
The PMI serves as a crucial gauge of economic activity, offering insights into the overall health of the economy. A sustained contraction, as evidenced in November, raises concerns about the challenges facing businesses in Nigeria. Factors such as weak demand, supply chain disruptions, or unfavourable macroeconomic conditions may be influencing this downward trend.
The contraction signals a need for policy intervention to address underlying economic challenges, particularly as the year draws to a close. Policymakers, industry stakeholders, and businesses will be keenly observing December’s performance to assess whether these trends will persist or reverse in the months ahead.
