The latest Purchasing Managers’ Index (PMI) report from the Central Bank of Nigeria (CBN) for July 2024 indicates a continued decline in employment levels across various sectors, reflecting ongoing challenges in the labour market.
Persistent Contraction in Employment Levels
According to the report, the Composite Employment Index recorded 48.7 points in July 2024, marking the seventh consecutive month of contraction. Although this represents a slight improvement from the 48.3 points recorded in June 2024, it still points to significant difficulties businesses face in maintaining or expanding their workforce.
The report states:
“At 48.7 index points, the composite Employment Level indicated contraction in July 2024 for the seventh consecutive month. The index improved in July 2024 when compared to the 48.3 points recorded in the previous month.”
Employment Declines in Key Subsectors
The report highlights that 18 subsectors experienced a decline in employment, with the Printing & Related Support Activities subsector recording the most significant decrease. In contrast, the Primary Metal subsector remained stable, showing no change in employment levels. However, 17 other subsectors reported increases in employment, with the Petroleum & Coal Products subsector leading the way.
The report notes:
“Eighteen subsectors reported a contraction in Employment, with Printing & Related Support Activities recording the highest decline in the review month. Primary Metal subsector remained unchanged, while the remaining 17 subsectors reported increased Employment Levels, with Petroleum & Coal Products subsector having the higher Employment Level.”
Sector-Specific Trends
- Industrial Sector: The employment index in the industrial sector dropped to 47.0 points, reflecting a persistent reduction in workforce levels across several subsectors, including Printing & Related Support Activities and Primary Metal.
- Services Sector: Employment remained stagnant at 50.0 points, with some subsectors experiencing growth while others reported contractions.
- Agricultural Sector: The employment index stood at 47.8 points, driven by significant drops in the Fishing/Fish Farming and Livestock subsectors.
Broader Economic Context
The report underscores the continued contraction in economic activities, marking the 13th consecutive month of decline since June 2023. The PMI for July stood at 49.7 points, indicating a contraction in economic activities, albeit with slight improvement from the 48.8 points recorded in June.
This ongoing contraction in employment levels highlights the need for targeted economic policies to stimulate job creation and support industries facing the most significant challenges.
Unemployment Trends
According to the last unemployment report by the National Bureau of Statistics (NBS), Nigeria’s unemployment rate rose to 5.0% in Q3 2023 from 4.2% in Q2 2023. The report also noted that urban areas have a higher unemployment rate (6.0%) than rural areas (4.0%).
Conclusion
The CBN’s July 2024 PMI report underscores the ongoing challenges within Nigeria’s labour market, with many businesses continuing to reduce their workforce. Despite some marginal improvements, the overall trend highlights the pressing need for policies that can drive the country’s job creation and economic growth.
