CBN: Service industry expanded, industrial sector contracted in September

The Central Bank of Nigeria (CBN) says the industry sector contracted in September, while the agriculture and service sectors expanded.

In its Purchasing Manager’s Index (PMI) report published on Wednesday, CBN said the composite PMI — which is the combination of the sectors’ performance — for September 2024 stood at 50.5 index points, indicating expansion in economic activities for the second consecutive month, compared to 50.2 points in August.

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

According to the apex bank, an index above 50.0 points indicates an expansion in business activities, while below 50.0 points indicates a contraction in business activities.

Also, an index of 50.0 indicates a no-change situation.

INDUSTRY SECTOR

CBN said the industry sector contracted, closing September with 49.7 points, the figure represents an improvement compared to the level (49.2 points) in August.

The apex bank said the difference between the levels in August and September indicates that there has been a noticeable rebound in industrial activities in recent months, even though the sector remains in a state of contraction.

“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,” CBN said.

“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.

“The Stock of Output and Raw Materials indices grew at 50.7 and 51.7 points, respectively. The New Orders and Employment declined at 49.9 and 48.2 index points, respectively, while the Suppliers’ Delivery Time index was slower at 48.4 index points in September 2024 (Fig. 12).

SERVICE SECTOR

In the PMI report, CBN said the service sector index was 51.0 points in September, indicating expansion for the fourth consecutive month.

In August, the service sector recorded 50.7 points.

“This growth is attributable to the increasing level of business activity, higher Stock Levels of Raw Materials, and a continued rise in incoming business opportunities,” the apex bank said.

“Among the 14 subsectors surveyed, nine recorded growths, while five experienced declines. Notably, the Finance and Insurance subsector registered the highest expansion, while Transportation and Warehousing faced the most significant contraction.

“The Business Activity, New Orders and Stock of Raw Materials grew at 50.9, 52.2 and 51.2 points, respectively. However, Employment is declining at 49.5 points.”

AGRICULTURE SECTOR

The agriculture sector index recorded an expansion in economic activities for the second consecutive month, closing September with an expansionary level of 51.4 points, compared to 50.5 points the previous month.

“Among the five surveyed subsectors, Crop Production, Livestock, Forestry and Agricultural Support Services recorded expansion in the review month, while Fishing/Fish Farming recorded decline,” CBN said.

“The General Farming Activity, New Orders and the Stock of Agricultural Inventory reported growth at 50.5, 54.5 and 51.2 points, respectively.”

However, the employment level declined, ending the review period with 49.1 points.