By Peter Egwuatu
The Purchasing Managers’ Index, PMI, rose marginally to 51.1 in the month of April 2024, occasioned by the slowdown in rate of increases in prices and output charges.
The Stanbic IBTC’s PMI survey report released yesterday revealed that inflationary pressures softened in the Nigerian private sector during the month as against the position in the previous month of March.
The headline PMI ticked up to 51.1 in April from 51.0 in March 2024, pointing to a fifth consecutive monthly improvement in business conditions in the country’s private sector.
PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.
The report stated, “Rates of inflation remained elevated, however, and limited growth of output and new orders as well as leading some firms to reduce employment.
“Conditions for firms continued to be heavily influenced by movements in the naira and the subsequent impact on prices. An improvement in the strength of the currency over the past month led to sharp slowdowns in rates of increase in purchase prices and output charges, although inflationary pressures remained substantial nonetheless. The latest rise in selling prices was the softest in just under a year. Slower price increases were seen across all four broad sectors covered by the survey.”
It noted that although price increases were less pronounced than in March, the extent of inflationary pressures continued to limit rates of growth in output and new orders in April, both of which were unchanged from the previous month.
“Agriculture and manufacturing both saw output increase sharply, while wholesale & retail activity also rose. On the other hand, services activity decreased.
As well as seeing purchase cost inflation soften in April, firms also saw a slower rise in employee expenses. Staff costs increased modestly, and at the weakest pace in 13 months. Nevertheless, cost pressures led some companies to reduce staffing levels. This was broadly cancelled out by hiring elsewhere, however, meaning that overall employment was little changed in April following falls in February and March.
“The sustained absence of job creation at a time of rising new orders meant that backlogs of work accumulated for the second month running. Delays were also caused by issues securing materials due to higher prices and difficulties receiving payment for orders from customers. “Rising new orders led to modest expansions in purchasing activity and inventory holdings at the start of the second quarter of the year,” the report added.
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