For the first time in the last three months, the country’s Purchasing Managers’ Index (PMI) has risen above the 50.0 no-change mark to stand at 53.8 in April compared with 42.3 in March, according to Stanbic IBTC Bank’s Nigeria PMI report for last month. The report attributed the expansion to the easing of the cash crisis which adversely affected economic activities in the first three months of the year.
The report said: “The head- line PMI moved back above the 50.0 no-change mark for the first time in three months during April. At 53.8, the index was up from 42.3 in March and pointed to a solid overall improvement in business in the private sector.
“According to respondents to the latest survey, the recovin operating conditions reflected an easing of the cash crisis which has severely affected the economy in recent months. Panellists reported a more normal business environment as customer numbers improved in line with greater access to cash.
“As a result, both output and new business expanded sharply in April, ending two- month sequences of decline in each case. Rebounds in activity were seen across each of the agriculture, manufacturing, services and wholesale & retail sectors.”
It, however, stated that business sentiment remained subdued in April, despite a slight pick-up from March, adding that “optimism was among the lowest seen since the survey began in January 2014.”
According to the report, the relatively subdued out- look meant that companies remained cautious with regards to hiring, and reduced employment marginally for the third consecutive month amid a slight decline in back- logs of work. However, it said that companies did increase their purchasing activity in response to higher new orders, with inventories also expanding. “Efforts to secure inputs were helped by an improvement in suppliers’ delivery times,” the report added. It further said: “Rates of increase in both purchase prices and staff costs quickened over the month.
Firms linked purchase price rises to higher raw material costs and currency weakness. Meanwhile, higher wages often reflected efforts to help staff with increased living costs. “In contrast to the picture for input costs, the rate of output price inflation moderated, easing for the fourth month running to a three- year low. Some firms reported having offered discounts to try and stimulate demand.”