Tony Chukwunyem 
For the first time in seven months, the country’s Purchasing Managers’ Index (PMI) dropped below the 50.0 no-change mark to 49.1 in October, from 51.1 in September, Stanbic IBTC Bank’s latest Nigeria PMI report has said.
The report stated that the PMI decline signalled a deterioration in business conditions in the private sector as a record increase in input costs negatively affected customer demand, even as sharply rising prices also discouraged firms from purchasing inputs and caused delays in the completion of orders.
Specifically, the report said: “Central to the challenges for firms in October was the sharpest rise in overall input prices since the survey began almost a decade ago. Purchase costs were up rapidly, largely due to currency weakness but also the lingering impacts of the removal of the fuel subsidy.
“Meanwhile, the extent of the rise in living costs, particularly those related to transportation, led companies to increase their staff pay markedly in October. Moreover, the rate of inflation hit a new survey peak.” It further stated: “With input costs rising rapidly, firms in Nigeria increased their own selling prices accordingly.
The pace of inflation quickened from September and was one of the sharpest on record. The steep inflationary environment acted to depress customer demand in October. New business decreased at a solid pace, thereby end- ing a six-month sequence of growth.”
In addition, the report said business activity was also down, “falling for the second time in the past three months and to the largest extent since the cash crisis earlier in the year.”
