Private Sector Activity Rises First Time in 6-Month in Nigeria –PMI
There were tentative signs of improvement in the Nigerian private sector during the final month of 2024, according to Stanbic IBTC purchasing manager index report by S&P Global.
Overall business conditions improved as new orders increased for the second month running and renewed expansions were seen in output, employment and purchasing. That said, rates of inflation remained elevated. The headline PMI moved back above the 50.0 no-change mark for the first time in six months during December.
At 52.7, the index was up from 49.6 in November and signaled a solid improvement in the health of the private sector that was the most pronounced since January 2024. New orders increased for the fourth time in the past five months, with the pace of expansion quickening to the fastest since May.
Respondents noted improving client demand and rising customer numbers. Sustained growth of new orders led to a renewed expansion of business activity in December, thereby ending a five month sequence of contraction.
All four broad sectors signaled rising output at the end of 2024. Companies also responded to higher new orders by recording fresh rises in both employment and purchasing activity.
Growth of input buying helped firms to accumulate stocks of purchases for the first time in five months.
Nigerian Firms were able to keep on top of workloads and depleted backlogs for the seventh month running, albeit marginally. The report noted that there were some signs of capacity pressures emerging in supply chains, however, with lead times shortening only fractionally and to the least extent since August 2023.
While prompt payments and competition among suppliers meant that lead times continued to shorten, poor road conditions and higher demand for inputs caused delays in some cases, PMI report revealed.
It also spotted improving trends across the private sector were recorded in spite of ongoing strong inflationary pressures. Purchase prices were up amid currency weakness and higher costs for fuel and transportation.
Transportation price pressures also contributed to an increase in staff costs. In turn, companies continued to increase their output prices at a rapid pace, with the rate of inflation quickening slightly from that seen in November. Although strengthening from the series low seen in the previous survey period, business confidence was still the third-lowest on record.
Some firms linked optimism to expected improvements in access to funding, helping them to invest in business expansions, while others were hopeful of an improvement in economic conditions in 2025, and a softening of inflationary pressures. #Private Sector Activity Rises First Time in 6-Month in Nigeria –PMI Ministry Seeks $2 billion Fibre Optics Funding
