In response, firms ramped up their purchasing activity and took on extra staff, but this expansion of capacity was not sufficient to prevent a build-up of backlogs of work.

Meanwhile, inflationary pressures ticked up from March but remained muted relative to the picture in 2024.

The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

Muyiwa Oni, head of Equity Research West Africa at Stanbic IBTC Bank commented:

“Nigeria’s private sector business activity maintained its positive momentum into the start of the second quarter of the year as the PMI settled at 54.2 in April – broadly in line with 54.3 recorded in March. This latest improvement in business activity was primarily due to improved customer demand amid softening inflationary pressures, helping to support higher new orders.

Accordingly, all the four monitored sectors posted an improvement in business activity with the most significant improvement seen in the Services sector.

In line with this improvement, the employment level increased for the fifth consecutive month, although the pace of increase was modest this time. Elsewhere, inflationary pressures continue to soften relative to 2024 as factors that significantly drove prices upward last year have moderated so far this year in terms of impacts.

Nonetheless, inflation increased in April compared to March, exacerbated by the impact of local currency depreciation and higher energy costs.

Continuing, Oni said”

Indeed, overall input prices increased across all the four monitored sectors with the Manufacturing sector witnessing the strongest inflationary pressures of the month.

The pass through of the higher input costs to customers meant that output price inflation also quickened in April but remained among the weakest in the past two years.

Nigeria’s business conditions started Q2:25 on a positive note, and we expect this trend to be maintained, albeit relatively slower than witnessed in Q1:25.

This is as the local currency is expected to depreciate in Q2:25 compared to Q1:25 amid the lingering global uncertainties.

This could also lead to slightly higher inflation rate than seen in Q1:25 but still expected to remain softer compared to the 2024 average. Nonetheless, interest rates are likely to be lower this year amid moderate inflationary pressures, thereby helping to support economic growth over the medium term.

“Overall, we still maintain our expectation that the Nigerian economy is likely to grow by 3.5% y/y in real terms in 2025 relative to 3.4% y/y growth in 2024.”

The headline PMI posted above the 50.0 no-change mark for the fifth consecutive month in April.

At 54.2, the PMI was broadly in line with the 54.3 posted in March and pointed to a solid monthly improvement in business conditions. Output increased at a sharp and accelerated pace in April, with the rate of expansion the most pronounced since January 2024.

All four broad sectors saw business activity rise, with the sharpest growth in services. Higher new orders and increased customer numbers were among the factors mentioned by respondents as having supported growth of output.

New orders rose sharply as demand conditions strengthened, with the pace of expansion little-changed from that seen in March.

In line with the picture for output, employment increased for the fifth consecutive month in April as firms responded to greater workloads and made efforts to complete orders on time. Although modest, the pace of job creation was at an eight-month high.

A desire to keep on top of orders was also behind a rapid increase in purchasing activity, with the pace of growth quickening to the fastest since February 2022. Stocks of purchases were also accumulated during the month.

Despite efforts to complete orders in a timely manner, companies saw backlogs of work increase in April.

The accumulation was the first in 11 months, albeit modest. High costs for materials in some cases meant that firms weren’t always able to secure the necessary inputs for projects, while other respondents mentioned that power outages had caused delays.

Purchase costs continued to rise sharply amid higher raw material prices and currency weakness. The pace of inflation was faster than in March, albeit still one of the slowest over the past two years. Staff costs rose at a solid pace.

The pass-through of higher input costs to customers meant that output prices also increased, with inflation here too slightly stronger than in March.

Companies remained optimistic that output will rise over the coming year, but sentiment dipped for the third consecutive month. Confidence often reflected business expansion and investment plans.

The post Stanbic: Nigeria’s PMI Shows Output Growth Hits 15-month High in April appeared first on Tech | Business | Economy.

Overall business conditions, according to the index, 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 figure derived from the PMI survey indicates that readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

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 signalled a solid improvement in the health of the private sector that was the most pronounced since January 2024.

Muyiwa Oni, head of Equity Research West Africa at Stanbic IBTC Bank commented:

“In line with the increase in economic activity usually associated with festive season in Nigeria, the private sector activity moved above the 50-points psychological threshold for the first time in six months, settling higher at 52.7 in December from 49.6 in November – its most pronounced improvement since January 2024.

This improved private sector activity reflects renewed expansions in output, purchasing, and employment level. New orders also increased for the second consecutive month, with the latest increase being the highest since May 2024, reflecting improvement in consumer demand. Nonetheless, while some firms increased employment in response to the higher new orders, others reported having to let staff go due to difficulties paying wages.

“Elsewhere, output (54.8 points vs November: 49.6) ended a five-month sequence of decline, with survey participants linking the rise in activity to increased customer numbers. Growth was recorded across each of the four broad sectors covered by the survey. Meanwhile, input prices remained elevated in December – prices increased across all four monitored sectors, with the most pronounced increase in the manufacturing sector.

As a result, output prices also remained elevated in December and ticked higher from that seen in November.

“We maintain our expectation that the broad economy is likely to maintain the Q3:24 growth momentum in Q4:24, supported by festive-induced increase in economic activity and sustained improvement in crude oil production. On balance, we estimate the economy to grow by 3.24% y/y in real terms in Q4:24 and adjust our 2024 growth estimate upward to 3.2% (previously: 3.1%)”, Oni said.

Over the medium term, some firms were optimistic of 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

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 signalled 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. Firms were able to keep on top of workloads and depleted backlogs for the seventh month running, albeit marginally.

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. 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.

The post Stanbic PMI: Business Activity Rises in December 2024, First Time in Six Months appeared first on Tech | Business | Economy.

There were signs of inflationary pressures picking up, with purchase prices, staff costs and selling charges all increasing more quickly than in May.

The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The headline PMI registered only fractionally above the 50.0 no [1]change mark in June to signal broadly unchanged business conditions at the end of the second quarter.

At 50.1, the index was down from 52.1 in May and the lowest in seven months.

Although new orders continued to rise in June, the rate of expansion was only marginal and the weakest in the current seven-month period of growth.

There were some reports of underlying demand improving, but sharp price rises meant that customers faced challenges being able to commit to new projects.

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank commented:

“The Stanbic IBTC headline PMI dropped to a seven-month low of 50.1 points in June from 52.1 in May due to moderation in domestic demand amid the intensification of price pressures, leading to slowdowns in growth of output and new orders.

Notably, new orders recorded a near stagnation as new business increased only marginally and at the slowest pace in the current seven-month sequence of expansion.

Besides, financial challenges at customers reportedly limited the ability of firms to fully benefit from any improvement in underlying demand.

In line with the picture for new orders, output rose at a slower pace during June, settling at its weakest level in four months.

Meanwhile, the rate of inflation in overall input prices remained elevated in June, ticking higher for the second month running to the strongest since March.

Close to 60% of respondents posted a rise in input costs during the month.

In line with the trend in input costs, companies increased their own selling prices sharply again in June. The pace of inflation quickened slightly from that seen in May.

“Nigeria’s private sector activity as measured by the headline PMI ended Q2:24 on a weak note as the domestic economy continues to be affected by elevated price pressures, high interest rates and lingering currency weakness.

The PMI reading in the quarter is consistent with a likely slowdown in non-oil sector’s growth to 2.6% y/y in Q2:24 from 2.8% y/y in Q1:24.

Nonetheless, headline inflation is likely to peak in June, with moderation expected in H2:24 as the year-on-year effects of PMS subsidy removal (which induced higher fuel prices) and significant currency depreciation (which accompanied the FX unification) fade.

This, in addition to the commencement of the primary harvest season in September, is likely to provide some respite for consumers in H2:24.

Companies increased their selling prices rapidly again in June, with the pace of inflation quickening slightly from that seen in May.

The sharper rise in output prices was in tandem with a faster increase in input costs.

Purchase price inflation was recorded amid currency weakness and higher raw material costs, particularly those related to animal feed.

Meanwhile, efforts to help workers with increased living and transportation costs led to a further solid rise in wages.

In line with the picture for new orders, output rose at a slower pace during June.

The rate of expansion was slight and the weakest in four months. The agriculture and manufacturing sectors posted faster increases in business activity than services and wholesale & retail.

Muted demand conditions enabled companies to reduce their backlogs of work for the first time in four months. Some firms indicated that they had cleared all outstanding business.

There were other reports, however, that difficulties securing materials (often linked to prices) caused delays in the completion of projects, meaning that the overall reduction in backlogs was only marginal.

With new order growth slowing and backlogs of work down, the vast majority of companies kept their staffing levels unchanged in June. Employment rose fractionally for the second month running.

Firms increased their purchasing activity at a solid pace, reflecting recent rises in new orders and efforts to get ahead of expected future price rises. Inventories also increased.

Business confidence remained among the lowest on record in June. Where firms were optimistic in the outlook for output, this was linked to plans for business expansions, the securing of new funding and efforts to export.

The post Nigeria’s Headline PMI Ends Q2:24 on a Weak Note appeared first on Tech | Business | Economy.

Purchase prices rose at the fastest pace in almost two years amid exchange rate weakness and higher costs for fuel and materials.

The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

At 48.0 in November, down from 49.1 in October, the headline PMI remained below the 50.0 no-change mark for the second month running midway through the final quarter of the year.

The index signalled a modest deterioration in business conditions, and one that was the most marked since the cash crisis in the opening quarter of the year.

The overall decline in operating conditions was in large part driven by further reductions in output and new orders. Both fell for the second month running, and to greater extents than in October.

Activity decreased particularly strongly at wholesale & retail companies, while agriculture was the only sector that posted an increase in output.

The declines in output and new orders generally reflected steep price rises and the impact these had on customer demand.

Companies raised their selling prices rapidly again in November, with the rate of inflation slowing only slightly and remaining among the strongest on record. Close to half of all respondents raised their charges during the month.

The rise in selling prices was in response to higher input costs. Purchase price inflation quickened to a near two-year high on the back of exchange rate weakness and higher costs for fuel and materials.

Wages also increased as companies looked to help staff with higher living and transportation costs.

Although business activity decreased again in November, firms continued to expand their staffing levels. Employment increased for the seventh month running, albeit modestly and to a lesser extent than in October.

Purchasing activity, meanwhile, was broadly unchanged following a fall in the previous survey period.

Meanwhile, a reduction in activity meant that fewer inputs were needed than had been expected, resulting in a further build-up of stocks of purchases.

Reduced demand for inputs, prompt payments and competition among suppliers meant that vendor lead times continued to shorten. Moreover, the rate of improvement hit a one-and-a[1]half year high.

Worries about the impact of inflationary pressures on demand caused business confidence to fall to the weakest since July’s record low.

That said, business investment and plans to open new plants supported optimism that output.

The post PMI Report: Business Confidence Declines to Weakest Level in November appeared first on Tech | Business | Economy.

Although new order growth quickened, helping to support a renewed increase in business activity, rates of expansion in each were only modest.

Input prices increased at one of the sharpest rates on record, largely due to exchange rate weakness and higher fuel costs.

The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The headline PMI posted 51.1 in September, up from 50.2 in August but still only just above the 50.0 no-change mark. As such, the index signalled a slight monthly improvement in business conditions.

New orders increased for the sixth month running in September as some firms signalled an improvement in demand. While the rate of expansion quickened from that in August, it remained only modest as market conditions remained weak and customers were deterred by price hikes.

Output returned to growth, meanwhile, following a slight reduction in August. In a similar vein to new orders, however, the pace of increase was only modest amid widespread demand weakness. Three of the four monitored sectors saw output expand, the exception being manufacturing.

Sharp rises in prices were a key factor limiting demand in the private sector at the end of the third quarter. Overall input costs rose at a pace that was only marginally weaker than August’s survey record.

Purchase costs were up substantially, mainly due to exchange rate weakness and higher fuel costs. Meanwhile, efforts by companies to help their staff deal with higher transportation costs meant that wages were raised markedly.

The Stanbic IBTC PMI shows the rate of staff cost inflation was only marginally softer than the series record posted in August.

Sharp increases in purchase costs fed through to a further steep rate of selling price inflation, despite the latest rise being the weakest since May.

Employment increased for the fifth successive month in September, albeit only slightly. Firms also expanded their purchasing activity, but the rate of growth eased to the weakest in six months. This was also the case with regards to stocks of purchases.

Suppliers’ delivery times shortened amid competition among vendors, prompt payments and quiet traffic conditions.

Confidence in the year-ahead outlook for output was unchanged in September, thereby remaining among the weakest on record.

Those companies that predicted a rise in activity linked this to plans to take on extra staff to help with business expansions.

The post Nigeria’s Headline Purchasing Index: Businesses Show Signs of Recovery appeared first on Tech | Business | Economy.

Output and new orders expanded for the second month running, with the latter increasing at the fastest pace in just over a year.

Confidence remained historically subdued, however, meaning that firms continued to operate a cautious approach with regard to hiring. Input costs rose sharply again, with output prices up accordingly.

That said, the rate of selling price inflation eased to the weakest since April 2020.

The headline figure derived from the survey is the Stanbic IBTC Bank Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions in the previous month, while readings below 50.0 show a deterioration. The headline PMI posted above the 50.0 no-change mark for the second month running in May, following the two-month sequence of decline seen around the worst of the cash crisis in the first quarter of the year.

At 54.0, up from 53.8 in April, the index signaled a solid improvement in business conditions that was the most marked in 2023 so far.

With access to cash improving, customer numbers increased, enabling firms to secure greater volumes of new orders in May.

New business was up sharply, with the rate of expansion the fastest since April 2022. Similarly, business activity rose for the second month running, and at a marked pace. Here, the expansion was slightly softer than in April, however.

The activity was up across each of the four broad sectors covered, with growth led by wholesale & retail.

Although higher new orders encouraged firms to increase their staffing levels for the first time in four months during May, the rate of job creation was only marginal amid signs that spare capacity remained in the private sector.

The weak pace of employment growth also partly reflected a relatively softer sentiment regarding the year-ahead outlook for activity. Although business expansion plans and predictions of further improvements in new orders supported positive forecasts, confidence dipped and was the second lowest on record.

More positively, firms increased their purchasing activity at a rapid and accelerated pace, with higher input buying helping companies to expand their inventories.

Purchase prices continued to rise sharply, albeit at a slightly softer pace than in the previous survey period.

Higher costs for agricultural inputs such as animal feeds, and rising prices for industrial raw materials, were often mentioned. Staff costs were also up as companies offered higher pay to employees to reflect greater workloads.

Although output prices rose markedly in response to higher costs, the pace of inflation eased to the softest in just over three years as some firms offered discounts to stimulate demand.

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