CBN: Nigeria’s economic activities expanded in August but employment level contracted

The Central Bank of Nigeria (CBN) says the country’s economic activities expanded in August despite experiencing a decline in employment levels across sectors.

In its Purchasing Manager’s Index (PMI) report published on Wednesday, CBN said the composite PMI for August 2024 stood at 50.2 index points – up from 49.7 points.

This indicates an expansion in economic activities after 13 consecutive months of contraction.

PMI is an indicator of the general direction of economic trends in the manufacturing and service sectors.

The apex bank said the PMI survey was conducted from August 12-16, to gauge the direction of economic activities in Nigeria for the month.

“The survey respondents were the company’s Purchasing and Supply Executives, drawn from the three sectors of the economy, namely: Industry, Services, and Agriculture,” CBN said. 

“The PMI is computed based on responses regarding the direction of change in different aspects of respondents’ business activities. 

“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.”

‘EMPLOYMENT LEVEL DROPPED’

However, according to the report, the employment level of all sectors of the economy dropped, representing contractions or below 50 points in the period under review.

“The Industry sector employment index in August 2024 stood at 47.5 points, indicating a contraction in the level of employment,” the apex bank said.

“Nine subsectors reported a contraction in the level of employment with the transportation equipment subsector reporting the highest contraction.”

According to the PMI, four subsectors in the industry sector reported growth in employment level, with electrical equipment reporting the highest growth, while the remaining four subsectors reported stationary levels in the month reviewed.

For the services sector, CBN said the employment index recorded a contraction at 49.2 points. 

Of the 14 services subsectors surveyed, CBN said seven subsectors reported a contraction in employment level under services. 

“Management of Companies and Transportation & Warehousing were stationary, while the remaining five subsectors reported growth in Employment,” CBN added.

Similarly, CBN said the agriculture employment index in August at 48.8 points, indicated a decline in the level of employment in the agriculture sector.

“Fishing/Fish Farming, Forestry and Livestock subsectors recorded declines in employment level while Crop Production and Agricultural Support Services registered growth in employment Level,” the apex bank added.

However, in July out of all sectors surveyed, only the services sector remained unchanged at 50.0 points, while other sectors recorded contractions or below the standard point.

On August 13, the CBN said it reintroduced the publication of several key economic reports.

CBN said the reports, including the PMI, business expectation survey (BES), inflation expectation report and other macroeconomic indicators, will provide stakeholders with timely and accurate insights into the country’s economic performance.