Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report, said the start of the fourth quarter revealed a solid improvement in the health of Nigeria’s private sector.
The headline PMI posted 53.6 in October from 53.7 in September, indicating a solid improvement in the health of the private sector.
The headline figure derived from the survey is the PMI. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
According to the report, output and new orders rose sharply while purchasing activity increased at an accelerated pace. At the same time, backlogs increased for the second month in a row, with sustained accumulation of outstanding business suggesting that hiring activity could continue in the months ahead.
“On the price front, price pressures showed further signs of abating with the overall rate of input cost inflation the weakest for three months, but still marked by historical standards. Selling prices were also raised, albeit at a softer rate than that seen in September.
“A key driver of growth was a sharp rise in new orders following reports of favourable and improving market conditions. In turn, firms raised their output levels and for the fourth month in a row. Moreover, the rate of increase was quicker than the long-run series average. Manufacturing firms registered the strongest increase in output, followed by services, wholesale & retail and finally agriculture,” it stated.
It added that backlogs increased for the second month in a row during October, but the rate of increase eased from that in September, saying firms subsequently continued hiring activity, but the rate of growth was mild, and the joint-weakest in the current 21-month sequence of job creation.
The report noted that sustained expansions in new orders led Nigerian private sector firms to raise their purchasing activity, with the rate of growth quickening on the month.
“Pre-production inventories also rose robustly, with the rate of growth quickening to a three-month high amid firms’ efforts to boost their stockpiles. Supply-chain performance improved, with lead times now shortening in each month for the last five years,” it added.
The report added that firms maintained an optimistic view towards output in the next 12 months, the degree of positivity was the second lowest in the series history, with that only recorded in September 2020 weaker.
