Business & Economy

Stanbic IBTC Bank Nigeria PMI® Output Falls At Fastest Pace In 19 Months Amid Intense Cost Pressures

More positively, firms increased their staffing levels marginally despite the drop in workloads. The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions in the previous month, while readings below 50.0 show a deterioration.

Severe inflationary pressures caused an intensification of the downturn in the Nigerian private sector at the start of the final quarter of the year. Overall input costs rose at one of the sharpest rates on record, with selling prices increasing accordingly. This resulted in marked reductions in new orders and business activity, while business sentiment was the lowest in the survey’s history.

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank commented: “Nigeria’s private sector activity worsened further in October, with the headline PMI settling at a 19-month low of 46.9 points from 49.8 in September. The notable reason for this worsening business environment in October was an intensification of already[1]strong inflationary pressures, reflecting currency weakness and higher prices for fuel and transportation.

Advertisement

Consequently, there was a marked reduction in new orders and business activity, while business sentiment was the lowest since the survey began in January 2014. Three of the four monitored sectors saw output fall, with only the agriculture sector bucking the wider trend to record a rise in output. Despite a sharp fall in new orders during October, Nigerian companies continued to increase their staffing levels slightly, thereby extending the current sequence of job creation to six months.

Stanbic IBTC Bank Nigeria PMI® Output Falls

The downturn in the business environment worsened at the start of Q4:24, still reflecting the impact of price pressures on consumer demand and business investments. Currency pressures and high interest rates are further intensifying the lingering pressure on the private sector. This continues to imply that the non-oil sector’s growth will remain weak, although improved crude oil production relative to the prior year may compensate for this lacklustre non-oil sector’s performance.”

The headline PMI dropped to 46.9 in October from 49.8 in September and signalled a marked deterioration in business conditions that was the most pronounced since March 2023. Central to the worsening business environment in October was an intensification of already strong inflationary pressures. Overall input prices surged higher, with the latest rise the third-fastest in the survey’s history. A steep increase in purchase costs reflected currency weakness and higher prices for fuel and transportation.

Advertisement

Meanwhile, efforts to help workers with rising living costs meant that staff pay was increased to the greatest extent in seven months. Faced with sharply rising input costs, Nigerian companies increased their selling prices rapidly too. The rate of charge inflation was the fastest since March and the fourth-strongest on record. Steep price rises had a severe impact on customer demand, and new orders declined for the first time in three months. Moreover, the rate of contraction was the sharpest since March 2023.

Business activity also decreased to the largest extent in 19 months, with only the agriculture sector bucking the wider trend to record a rise in output. Sharp falls in output and new orders dented business confidence in October, with sentiment falling to the lowest on record. Companies continued to increase their staffing levels, however, raising employment for the sixth month running, albeit modestly. Some firms took on staff on a short-term basis to make sure work was finished on time, but others reduced workforce numbers amid cost pressures.

Price pressures meanwhile contributed to a reduction in purchasing activity, with firms scaling back their input buying in response to falling client demand. The marked fall in purchasing was the most pronounced since March 2023. In turn, stocks of inputs also decreased, and for the third month running. Finally, weak demand for inputs, competition among suppliers and prompt payments meant that lead times on the delivery of inputs continued to shorten.

Advertisement
Facebook Comments
Brand News Day

Recent Posts

‘Mummy Of Lagos’ Denies Lagos, As Bobrisky Escapes Nigeria Amidst EFCC Saga

Controversial Nigerian crossdresser Idris Okunneye, popularly known as Bobrisky, has reportedly left Nigeria after two…

15 hours ago

Sujimoto Scandal Exposed: Shocking Reality Behind Fraud Allegations

Sujimoto CEO Sijibomi Ogundele arrived at the Force CID office in the capital city of…

15 hours ago

Lasaco Assurance Generates 39.40% Revenue Growth in Q3’2024

Lasaco Assurance Plc reported a 39.04 percent year-on-year rise in gross premium written to N20.06…

16 hours ago

Nigerian State Governors Reject President Tinubu’s Tax Reforms

Nigerian state governors have asked for the withdrawal of legislation to amend the nation’s tax…

16 hours ago

Innoson CEO, Chukwuma Urges Governors To Emulate Adamawa’s Stand To Made-in-Nigeria Products

Innoson CEO Chief Innocent Ifediaso Chukwuma, CON, has urged governors and other public officeholders to…

16 hours ago

BREAKING: American Citizen Who Helped Russian Army Since 2022 Declassified

An American citizen who has been helping the Russian army with espionage in Ukraine since…

2 days ago
Warning: Undefined variable $post in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5317 Warning: Attempt to read property "ID" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5317 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Undefined variable $rows in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Trying to access array offset on value of type null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322 Warning: Attempt to read property "seo" on null in /customers/e/a/5/brandnewsday.com/httpd.www/wp-content/plugins/schema-and-structured-data-for-wp/admin_section/common-function.php on line 5322

This website uses cookies.