October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020

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Freshly released Purchasing Managers’ Index (PMI) survey report by Central Bank of Nigeria (CBN) showed that the manufacturing and non-manufacturing sectors witnessed further recovery from contraction, nearing 50 index points (which indicates neutrality), as production level and business activities picked amid improved new orders.

Specifically, the manufacturing composite PMI printed slower contraction to 49.4 index points in October (from 46.9 in September), the sixth consecutive contraction. The slower contraction in manufacturing composite PMI was chiefly driven by an increase in new orders index, to 51.2 in October 2020 (from 46.4 in September 2020), which resulted in higher production – the production index pointed to 50.0 (from 47.3).

October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 Brandspurng1
Source: National Bureau of Statistics, 0pec, Cowry Research; *Cowry Research Estimates

October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020

Producers’ costs of production increased slightly (input prices index rose to 70.9 from 69.8) and they were able to pass on costs to customers (output prices index increased to 60.0 from 58.8), suggesting a possible rise in inflation rate going forward even as festivities beacon.

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Also, supplies of raw materials to manufacturers slowed amid increasing demand from producers – supplier delivery time index fell to 51.8 in October (from 53.5 in September). Given the delay from suppliers’ end, manufacturers stocked up raw materials – raw materials/work-in-progress index moved up, to 46.2 from 43.0 – reflected by the quantity of purchases index which inched up to 47.8 from 42.9.

We saw the stock of finished goods fall – its index rose to 44.9 in October 2020 from 45.8 in September 2020 – on account of improved sales. Similarly, contraction in staffing levels in the manufacturing space slowed given the increase in production volume – employment index rose further to 46.0 points in October 2020 (compared to 44.1 points in September 2020).

Of the fourteen manufacturing subsectors, Transportation equipment sub-sector index expanded to 59.6 points in October 2020 from 58.1 points in September 2020 while the Printing & related support activities, Chemical & pharmaceutical products and Textile, apparel, leather & footwear sub-sectors recovered from contractions to 52.9 points (from 43.3 points), 52.6 points (47.8 points) and 50.9 points (47.5 points) respectively. Meanwhile, the non-manufacturing sector also recorded slower contraction as its composite PMI increased to 46.8 index points in October 2020 (from 41.9 index points in September 2020).

Read Also:  COVID-19: Actions To Curb Spread Send PMI To Very Weak Expansion

This was chiefly driven by improved business activity to 48.7 (from 43.7) as incoming business index jumped to 47.8 from 39.5. Consequently, the employment index point further increased, to 44.2 (from 37.4). The incoming business still improved in spite of the rise in the average price of inputs, to 52.9 index points in October 2020 (from 51.2 index points in September 2020).

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Elsewhere, crude oil prices at the international oil market fell further amid slower demand from Europe and Asian refiners as well as a 0.89% weekly rise in U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) to 492.43 million barrels as at October 23, 2020 (inventories have risen by 12.21% y-o-y from 438.85 million barrels as at October 25, 2019).

WTI crude price moderated week-on-week (w-o-w) by 11.36% to USD36.02 a barrel; in spite of 2.78% w-o-w rise in US crude oil input to refineries to 13.39 mb/d as at October 23, 2020 (albeit, It has declined y-o-y by 16.31% from 15.99 mb/d as at October 25, 2019). Elsewhere, Brent price also tanked by 11.47% to USD37.65 a barrel as at Thursday, October 29, 2020; also, Bonny Light fell by 11.42% to USD37.23 a barrel.

In line with our expectations, PMIs improved in the month of October 2020 amid progressive ease in lockdown. Nevertheless, we expect GDP in Q3 2020 to still herald the anticipated economic recession even as economic growth may partly be dented by the recent riots across the country.

COWRY RESEARCH

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October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 - Brand Spur

DirectAsia Reveals 5 Factors That Could Influence Your Car Insurance Quotes...

SINGAPORE - Media OutReach - 14 May 2021 - Despite global economic disruptions brought about by the COVID-19 pandemic, car insurance premiums remain steep in Singapore. In a bid to help car owners make informed decisions about their vehicle insurance coverage and ensure accessibility of car insurance, DirectAsia, Singapore's leading online insurer, points out that individuals must first be educated on the determinants of one's policy. The organisation thus puts its support behind car owners by revealing several factors that insurers weigh when pricing out a quote.


October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 - Brand Spur


1. Vehicle Make and Model

Continental cars, luxury cars and SUVs are typically tied to higher insurance rates. These can be attributed to the importing fees and expensive parts. On the contrary, vehicle owners can anticipate lower insurance rates when owning a car from Japanese or Korean brands.

2. Age of Car

New vehicles are obligated to higher insurance rates as the potential costs of repairing or replacing the car parts are being considered. The rates dip as the car ages and stay at a minimum when the vehicle reaches ten years or more.

3. Experience & Age of Insured


Given that younger drivers have a higher propensity to take risks while driving and pose a greater likelihood of being involved in car accidents, insurers tend to charge higher rates for this age group. This also applies to novice drivers with less than two years of experience behind the wheels. Following that are senior drivers above the age of 65, who may have higher risk of accidents on the roads.

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4. Vehicle Modifications


Car modification is one of the lesser-known factors that could raise your insurance premium. Despite that, DirectAsia emphasises the importance of declaring any modifications to the insurer or prospective insurer, as non-disclosure may result in future claims being repudiated.

5. Claim History

Lastly, claim history is also added to the equation. If a single claim above $10,000 or two or more claims were made in the past three years, insurers might add on loading fees, which results in a higher base premium.

Conversely, individuals with good driving records and no past claims within one year or more are entitled to no claim discount(NCD). This can go up to 60% at DirectAsia.

Revolutionising Car Insurance in Singapore and Beyond


Besides understanding the rating factors, DirectAsia highlights that finding the right insurer to meet an individual's unique lifestyles, preferences and needs is equally critical.

Reflecting DirectAsia's relentless commitment to delivering unrivalled value are its tailored and transparent policies, complemented with exclusive promotions and optional benefits like NCD Protector Plus, Compensation for Loss of Use and more. Both experienced and inexperienced drivers can expect highly customisable motor insurance policies from the award-winning insurer.

Interested individuals can reach out to DirectAsia for a no-commitment quote here.

About DirectAsia Singapore

DirectAsia, a subsidiary of the Hiscox Group, was launched in Singapore in 2010 with a goal of changing the face of insurance in Asia. The industry leader places its customers at the forefront and seeks to make insurance less complex by offering quick, convenient and transparent online insurance policies that are jargon-free. For more information, please visit: https://www.directasia.com/.


#DirectAsia

October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 - Brand Spur
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Latest News

DirectAsia Reveals 5 Factors That Could Influence Your Car Insurance Quotes in Singapore

SINGAPORE - Media OutReach - 14 May 2021 - Despite global economic disruptions brought about by the COVID-19 pandemic, car insurance premiums remain steep in Singapore. In a bid to help car owners make informed decisions about their vehicle insurance coverage and ensure accessibility of car insurance, DirectAsia, Singapore's leading online insurer, points out that individuals must first be educated on the determinants of one's policy. The organisation thus puts its support behind car owners by revealing several factors that insurers weigh when pricing out a quote.


October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 - Brand Spur


1. Vehicle Make and Model

Continental cars, luxury cars and SUVs are typically tied to higher insurance rates. These can be attributed to the importing fees and expensive parts. On the contrary, vehicle owners can anticipate lower insurance rates when owning a car from Japanese or Korean brands.

2. Age of Car

New vehicles are obligated to higher insurance rates as the potential costs of repairing or replacing the car parts are being considered. The rates dip as the car ages and stay at a minimum when the vehicle reaches ten years or more.

3. Experience & Age of Insured


Given that younger drivers have a higher propensity to take risks while driving and pose a greater likelihood of being involved in car accidents, insurers tend to charge higher rates for this age group. This also applies to novice drivers with less than two years of experience behind the wheels. Following that are senior drivers above the age of 65, who may have higher risk of accidents on the roads.

4. Vehicle Modifications


Car modification is one of the lesser-known factors that could raise your insurance premium. Despite that, DirectAsia emphasises the importance of declaring any modifications to the insurer or prospective insurer, as non-disclosure may result in future claims being repudiated.

5. Claim History

Lastly, claim history is also added to the equation. If a single claim above $10,000 or two or more claims were made in the past three years, insurers might add on loading fees, which results in a higher base premium.

Conversely, individuals with good driving records and no past claims within one year or more are entitled to no claim discount(NCD). This can go up to 60% at DirectAsia.

Revolutionising Car Insurance in Singapore and Beyond


Besides understanding the rating factors, DirectAsia highlights that finding the right insurer to meet an individual's unique lifestyles, preferences and needs is equally critical.

Reflecting DirectAsia's relentless commitment to delivering unrivalled value are its tailored and transparent policies, complemented with exclusive promotions and optional benefits like NCD Protector Plus, Compensation for Loss of Use and more. Both experienced and inexperienced drivers can expect highly customisable motor insurance policies from the award-winning insurer.

Interested individuals can reach out to DirectAsia for a no-commitment quote here.

About DirectAsia Singapore

DirectAsia, a subsidiary of the Hiscox Group, was launched in Singapore in 2010 with a goal of changing the face of insurance in Asia. The industry leader places its customers at the forefront and seeks to make insurance less complex by offering quick, convenient and transparent online insurance policies that are jargon-free. For more information, please visit: https://www.directasia.com/.


#DirectAsia

October PMIs Near 50 Index Points, Signal Improved Economic Activities in Q3 2020 - Brand Spur
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