The Central Bank of Nigeria’s (CBN) latest Purchasing Managers’ Index (PMI) report for July 2024 reveals that the Composite Employment Index has declined for the seventh consecutive month, underscoring ongoing challenges in the labor market.
The report indicates that the index recorded 48.7 points in July, reflecting a contraction but showing a slight improvement from June’s 48.3 points.
According to the report: “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 compared to the 48.3 points recorded in the previous month.”
Employment levels fell in 18 subsectors, with the Printing & Related Support Activities subsector experiencing the most significant decline.
Conversely, the Primary Metal subsector saw no change in employment levels, while 17 other subsectors, including Petroleum & Coal Products, reported increases in employment.
The report notes: “Eighteen subsectors reported a contraction in Employment, with Printing & Related Support Activities recording the highest decline.
The Primary Metal subsector remained unchanged, while 17 subsectors reported increased Employment Levels, with Petroleum & Coal Products leading.”
The persistent contraction in employment highlights the difficulties businesses face in maintaining or expanding their workforce amid a challenging economic environment.
The slight improvement in the index suggests a slow recovery but emphasizes the need for targeted economic policies to stimulate job creation and support struggling industries.
In the industrial sector, the employment index fell to 47.0 points, reflecting ongoing workforce reductions in subsectors such as Printing & Related Support Activities and Primary Metal.
The services sector’s employment remained stable at 50.0 points, with some subsectors experiencing growth and others reporting declines.
The agricultural sector also saw a continued drop, with the index at 47.8 points, driven by reductions in Fishing/Fish Farming and Livestock subsectors.
According to the National Bureau of Statistics (NBS), Nigeria’s unemployment rate rose to 5.0% in Q3 2023 from 4.2% in the previous quarter, highlighting broader employment challenges.
Urban areas reported a higher unemployment rate of 6.0%, compared to 4.0% in rural areas. The labor force participation rate declined to 79.5%, down from 80.4% in Q2 2023.
Nairametrics previously reported that the CBN’s PMI for July showed a continued contraction in economic activities, marking the 13th consecutive month of decline since June 2023.
The PMI for the month stood at 49.7 points, signaling contraction but an improvement from June’s 48.8 points. The PMI, which gauges changes in business activity, remains below the 50.0-point threshold that indicates expansion.
