Business conditions in Nigeria’s private sector remained stagnant in August, according to the Stanbic IBTC Bank Purchasing Managers’ Index (PMI). Although new orders returned to growth, the rate of expansion was modest and insufficient to result in a rise in business activity, which fell slightly. However, employment continued to increase as companies worked through outstanding business at a faster pace.
Companies continued to face sharply rising input costs, with the rate of inflation quickening since July. In turn, firms increased their own selling prices at a faster pace.
The headline PMI ticked up to 49.9 in August from 49.2 in July, but remained just below the 50.0 no-change mark, indicating a broadly stable picture for business conditions.
The stagnation in overall operating conditions was in line with the trend in business activity, which decreased fractionally for the second consecutive month. Companies reported that demand remained muted amid strong inflationary pressures, but there were some signs of encouragement as new orders returned to growth.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented: “Nigeria’s headline PMI increased slightly to 49.9 points in August, but remained below the 50.0 threshold, indicating a broadly stable picture for business conditions.
