By Adedapo Adesanya
Nigeria’s Purchasing Managers’ Index (PMI) eased to 53.9 basis points in May 2022 from 55.8 basis points in April, but stayed above the 50-mark separating growth from contraction, according to the index published by Stanbic IBTC Bank.
The report, which covers the fifth month of the year, signalled a 23rd successive monthly improvement in business conditions in the country’s private sector.
The purchasing index report noted that although output growth slowed considerably in May, new orders continue to expand sharply.
According to the report, while the overall rate of growth was sharp, it eased to an eight-month low amid elevated costs.
Nevertheless, it noted that companies were committed to raising their inventories as part of efforts to protect against future price hikes.
The report said: “Business conditions in Nigeria’s private sector strengthened in May, but the rate of improvement slowed from April.”
Softer uplifts were recorded in output, new orders, purchasing activity and input inventories. This indicated that new orders continued to rise sharply, which prompted a quicker expansion in headcounts.
In turn, sentiment improved with companies also hoping that fruitful marketing campaigns would support output growth over the next 12 months.
“Sharp price pressures were once again evident, however, with overall input price inflation among the quickest in the survey’s over 8-year history. Firms passed on higher expenses and sought to increase profit margins with output price inflation quickening in May.
]“New orders rose sharply in May, albeit at a softer pace than in April. Firms raised their output levels, extending the current run of output growth to 18 months. All four of the monitored sub-sectors recorded marked expansions, led by the manufacturing sector. Services, wholesale & retail and agriculture trailed behind,” it stated.
Modupe Gbadeyanka