Nigeria’s Purchasing Managers Index (PMI) rose to 54.1 in October from 52.3 in September, according to a report by Stanbic IBTC Bank.
The headline PMI improved from 52.3 in September to 54.1 in October, indicating a sixteenth successive monthly expansion.
The company said the growth indicated a 16th successive monthly expansion, and also signalled a solid improvement in business conditions in Nigeria’s private sector with output, new orders and buying activity rising sharply.
According to the report, the rate of growth was robust, quickened from that seen in September and outpaced the long-run series average.
“Consequently, firms raised their output levels at a marked and accelerated pace. Sector data indicated that all four sub-sectors saw faster increases in output. Manufacturers registered the steepest expansion, followed by wholesale and retail, services and agriculture, respectively,” it said.
It noted that, “to support an 11th monthly rise in output, firms raised their buying activity during the month. Purchases have now increased in each month since July 2020, with the latest uptick, the second-fastest in the current sequence of growth.
“Meanwhile, backlogs fell substantially in October, with the pace of depletion amongst the quickest in the series.
cient capacity to complete incoming new orders. Despite this, companies added to their headcounts, although the rate of growth was only modest.
“Overall input prices rose substantially, which firms linked to unfavourable exchange rate movements as well as higher raw material, staff and transportation costs. In fact, purchase cost inflation quickened to a fresh series high. Firms opted to pass on part of the burden to clients by lifting their selling charges, which they did at the third-quickest rate in the series history.”
Stanbic IBTC stated further that, “accelerating input costs led firms to protect against future price hikes by adding to their stockpiles. Concerns surrounding prices fed through to sentiment with confidence moderating in October and registering below the average for 2021 so far. Nevertheless, firms remained hopeful that greater investment will encourage output growth in the year ahead.”
The headline figure derived from the survey is the PMI, carried out by Stanbic IBTC Bank with readings above 50 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.