No, it doesn't have to be numbered unless, like @dmckee comments, you have received specific instructions to do the numbering.
I think your question can best be split up in 2 parts for the answer: writing a report and writing a research paper.
Writing a report
For a report the main goal is typically to show exactly what you have done and how you have done it. Quite often the report will be used by other students to continue your work. For this purpose it is convenient to have a numbered list for the methods, because it immediately attracts attention and makes it easy to follow the 'recipe'.
Writing a research paper
When you write a research paper your goal is in general to resolve a particular issue that exists in the scientific community. Your focus will be on the research question and the conclusions you can draw from the experiments/simulations that you did. In this case a numbered list for the method will draw way too much attention to it, much more than it deserves. It is, after all, easy to spot because it disrupts the flow of the paper. In some journals it is not even allowed to use numbered lists if they are not inline (i.e. 1) ... 2) ...).
So in conclusion, if you don't have specific instructions from someone 'higher up': use the numbered list if you want to focus on the method, use the paragraph if you want to focus on a different part of the report/paper