By Charles Ike-Okoh
THUR, 19 NOV, 2020-theGBJournal– Despite the recovery seen in Nigeria’s manufacturing sector in recent months following the easing of COVID-19 lockdown, employment has continued to fall.
The November 2020 Central Bank of Nigeria (CBN) Purchasing Managers’ Index (PMI) Survey Report reflects the struggle for the sector to shake-off the pandemic’s impact on bottomline, and the consequences for employment in the country.
In August, the World Bank reported as much as 42% of people surveyed have lost their jobs during the pandemic. On the other hand, the Q2 2020 National Bureau of Statistics (NBS) unemployment figure shows that 27.1% of the country’s workforce of about 80.29 million is out of work.
All of these are pressuring the country’s misery index as well with inflation trajectory forecast to continue pointing north until the end of the year. Headline inflation expanded by 52bps in October 2020 to 14.23% y/y (September: 13.71% y/y), the highest level since February 2018.
Economists blame Nigeria’s unemployment on a combination of bad fiscal policies and burdensome restrictions on businesses as well as frequent conflicting foreign exchange policies. On the misery index, Nigeria ranks (6th Hanke’s Annual Misery Index 2018) as one of the saddest countries in the world.
Meanwhile, the Manufacturing PMI report shows 9 subsectors recorded lower employment level in the review month of the 14 subsectors. Only 5 subsectors recorded growth in employment. The employment level index stands at 47.3 points.
Also at 46.7 points, the Non-Manufacturing PMI shrank in the month under review, the eighth consecutive months. Only three of the 17 subsectors reported growth in employment level (above 50% threshold), 1 sector reported stationary level, while the remaining 13 subsectors recorded declines in new orders in the review month.
Overall, the Manufacturing PMI in the month of November stood at 50.2 index points, reflecting some gains from contraction in the sector recorded since May 2020. Of 14 subsectors surveyed, 8 subsectors reported expansion (above 50% threshold) in the review month.
The expansion were reported in Transportation equipment, Nonmetallic mineral products, Furniture & related products, Cement, Textile, apparel, leather & footwear, Plastics & rubber products, Food, beverage & tobacco products and Printing & related support activities.
Electrical equipment, Petroleum & coal products, Chemical & pharmaceutical products, Primary metal, Paper products and Fabricated metal products, all reported contraction in business activities.
PMI for the non-manufacturing sector stood at 47.6 points with only 3 subsectors reporting growth in the following order. These are the Transportation & warehousing, Health care & social assistance and Agriculture while Thirteen subsectors reported declines.