The latest Stanbic IBTC Purchasing Managers’ Index™ (PMI®) for Nigeria has shown a modest yet positive improvement in business conditions.
The PMI for September stood at 51.1, up from 50.2 in August, indicating a slight monthly upturn in the private sector.
This encouraging development comes despite the challenges faced by businesses in Nigeria.
Strong cost pressures, driven by exchange rate weakness and higher fuel costs, have continued to affect firms operating in the private sector.
These factors have contributed to a steep increase in input prices, with some of the sharpest rate rises on record.
The PMI is a crucial indicator of business conditions, with readings above 50.0 signaling an improvement compared to the previous month, while readings below 50.0 indicate a deterioration.
Despite the rise in input costs, selling prices saw a steep rate of inflation. This was driven by the cumulative effects of increased purchase costs, despite being the weakest inflation rate since May.
Employment continued to grow slightly for the fifth consecutive month, indicating a cautious expansion. Purchasing activity also expanded, but the rate of growth slowed to a six-month low.
A similar trend was observed in the growth of stocks of purchases.
Suppliers’ delivery times were shortened due to competition among vendors, prompt payments, and favourable traffic conditions.
Looking ahead, confidence in the year-ahead outlook for output remained unchanged in September, but it remains one of the weakest on record. Companies that predicted an increase in activity primarily linked it to plans to hire additional staff to support business expansion.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, shared his insights on the latest PMI figures: