By Dipo Olowookere
Business conditions in Nigeria improved in September 2020, though at a slower pace, a report released on Tuesday by Stanbic IBTC has revealed.
In its monthly Purchasing Managers’ Index (PMI) readings, it was disclosed that the Nigerian private sector recorded signs of moderation as rates of expansion in output and new orders softened.
At 52.5 in September, the headline seasonally adjusted PMI signalled expansion and one which extended the current sequence of strengthening business conditions to three months. That said, down from 54.6 in August, the reading pointed to more moderate improvement.
Companies continued to expand purchasing activity and employment in line with higher new orders, the report said, noting that suppliers’ delivery times improved further amid a lack of road congestion.
Meanwhile, increased workforce numbers and sufficient capacity to fulfil new orders led to a series- record decline in the level of incomplete work.
Looking forward, however, business sentiment was the weakest since the start of the survey in January 2014 as some firms reported difficulty planning for the year ahead, the report said.
On the price front, it was stated that overall input price inflation was marked and was driven by an increase in raw material costs and unfavourable exchange rates against the US dollar.
It was said that last month, output and new orders rose sharply and in both cases, firms attributed the growth to improvements in customer demand following the easing of restrictions related to the coronavirus disease 2019 (COVID-19).
Higher workloads prompted firms to increase staffing levels which led to the fastest pace of job creation since February. The rise in workforce numbers paired with sufficient capacity led to series-record depletion in the amount of outstanding business.
Looking ahead, business confidence remained positive overall as firms continue to foresee a rise in output over the year ahead, the report said.
