New Telegraph

Report: Nigeria’s PMI rose to 54.3 in November

Stanbic IBTC Bank’s Nigeria Purchasing Managers’ Index (PMI), which is compiled by S&P Global, rose to 54.3 in November from 53.6 in October, according to a report issued by the lender.

The report stated that business conditions continued to  improve significantly in the Nigerian private sector during November amid improving demand and higher customer numbers, adding that firms expanded their purchasing activity and employment.


It, however, said that business confidence dropped to the lowest since the survey began in January 2014.

According to the report, readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. Specifically, the report said: “The headline PMI rose to 54.3 in November from 53.6 in October, pointing to a solid monthly improvement in business conditions in the Nigerian private  sector. The health of the private sector has now strengthened in 29 successive months, with the latest improvement the most pronounced since April.

“New business increased at the fastest pace in six months amid reports of stronger demand and higher customer numbers. Companies responded to rising demand by increasing their business activity accordingly. Output has now risen in each of the past five months.

“Marked increases in activity were seen across each of the four broad sectors covered by the survey. New order growth also encouraged companies to expand their employment and purchasing activity midway through the final quarter of  the year.”

It further stated that staffing levels increased for the twentysecond month running and at the fastest pace since August, adding that the rate of growth in purchasing activity was the steepest in four months even as inventories also expanded at a marked pace. However, the report said that purchase costs rose at a sharper pace as “weakness of the naira against the US dollar exacerbated rising raw material prices.”

Similarly, it stated that staff costs were also up, occasioned by both higher staffing levels and efforts by employers to motivate workers by increasing wages. “The passing on of higher input costs to customers meant that output prices also increased markedly, with the rate of inflation quickening to a three-month high,” the report said. Thus, according to the report, “despite the generally positive picture for output and new orders in November, business confidence continued to decline.

Optimism dropped for the fourth successive month and was the lowest since the survey began in January 2014. Those firms that were confident in the year-ahead outlook for output mentioned business expansion plans and hopes for a further strengthening of demand.”

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