Business conditions continued to improve markedly in the Nigerian private sector in the month of November, according to the latest Purchasing Managers’ Index™ (PMI®). released by Stanbic IBTC Bank Plc, in what it says is amid improving demand and higher customer numbers, with firms expanding their purchasing activity and employment.
Headline figure derived from the survey, which is the Purchasing Managers’ Readings, according to the report continued at above 50.0, signaling an improvement in business conditions on the previous month, rose to 54.3, stronger than the previous 53.6 in October.
This, the report noted, points to a solid monthly improvement in business conditions in the Nigerian private sector, even as 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,” the report added.
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.
Staffing levels increased for the twenty-second month running and at the fastest pace since August. Meanwhile, the rate of growth in purchasing activity was the steepest in four months. Similarly, inventories also expanded at a marked pace.
Purchase costs, however, rose at a sharper pace as weakness of the Naira against the US dollar exacerbated rising raw material prices. Staff costs were also up, linked both to higher staffing levels and efforts 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 generally positive picture for output and new orders in November notwithstanding, the report noted a continued decline in business confidence, just as optimism dropped for the fourth successive month to its 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, while inflationary pressures remained elevated, often reflecting currency weakness.