Private Sector Activities Improved Slightly in July as PMI gained 0.9%
The Central Bank of Nigeria (CBN) has published its Purchasing Managers’ Index (PMI) survey report, indicating that the composite PMI reached 49.7 in July 2024, an increase from the 48.8 recorded in June 2024. The PMI serves as a gauge for the direction and magnitude of economic activity within a country.
An index reading below 50.0 signifies a contraction in business operations, whereas a reading above 50.0 indicates growth. A PMI of exactly 50.0 reflects no change in conditions. The July PMI value, remaining below the critical threshold of 50.0, marks the thirteenth consecutive month of contraction reported by the CBN, suggesting that business activities are still declining, albeit at a reduced rate compared to June.
A breakdown of the PMI by sector reveals that the industrial and agricultural sectors experienced contractions of 48.3 and 49.7, respectively, while the services sector recorded a PMI of 50.3, indicating modest growth and resilience. Conversely, manufacturing, production, and agricultural activities continue to face contraction due to ongoing challenges such as inadequate infrastructure and volatile commodity prices.
To address these issues, it is essential for the government to invest strategically in infrastructure and technology to enhance productivity and competitiveness. Additionally, providing farmers with improved access to modern equipment, better irrigation systems, and agricultural research can significantly increase their productivity and help mitigate contraction.
