Increased demand from consumers for the year-end holidays boosted the productivity of the private sector of the Nigerian economy to 52.7 points during the final month of 2024.
This was stated in the December 2024 report of the Purchasing Managers’ Index (PMI) of the Stanbic IBTC Bank.
The headline PMI moved back above the 50.0 no-change mark for the first time in six months during December. At 52.7, the index was up from 49.6 in November and signalled a solid improvement in the health of the private sector that was the most pronounced since January 2024.
The report said overall business conditions improved as new orders increased for the second month running and renewed expansions were seen in output, employment and purchasing.
It noted that “new orders increased for the fourth time in the past five months, with the pace of expansion quickening to the fastest since May. Respondents noted improving client demand and rising customer numbers.
“Sustained growth of new orders led to a renewed expansion of business activity in December, thereby ending a five- month sequence of contraction. All four broad sectors signalled rising output at the end of 2024.
“Companies also responded to higher new orders by recording fresh rises in both employment and purchasing activity. Growth of input buying helped firms to accumulate stocks of purchases for the first time in five months.”
The report observed that “improving trends across the private sector were recorded in spite of ongoing strong inflationary pressures. Purchase prices were up amid currency weakness and higher costs for fuel and transportation. Transportation price pressures also contributed to an increase in staff costs.
“In turn, companies continued to increase their output prices at a rapid pace, with the rate of inflation quickening slightly from that seen in November.”
It added that “although strengthening from the series low seen in the previous survey period, business confidence was still the third-lowest on record. Some firms linked optimism to expected improvements in access to funding, helping them to invest in business expansions, while others were hopeful of an improvement in economic conditions in 2025, and a softening of inflationary pressures.”
Speaking, head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni said, in line with the increase in economic activity usually associated with festive season in Nigeria, the private sector activity moved above the 50 points psychological threshold for the first time in six months, its most pronounced improvement since January 2024.
He stated that this improved private sector activity reflects renewed expansions in output, purchasing, and employment level, saying that new orders also increased for the second consecutive month, with the latest increase being the highest since May 2024, reflecting improvement in consumer demand.
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