Business growth in September exceeded analysts’ predictions
According to a new Purchasing Managers’ Index (PMI) released on Tuesday, business activity in Nigeria slightly increased last month, reversing a fall in August 2023. Business growth
This comes after BusinessDay stated that analysts were anticipating a further fall in September due to the escalating inflationary pressures caused by the elimination of the gasoline subsidy and the naira devaluation put into effect in the second quarter of the year.
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The headline index for the most recent monthly Stanbic IBTC Bank PMI data, calculated by S&P Global Market Intelligence, increased to 51.1 in September from 50.2 the month prior, the lowest reading over the previous five months.
Business conditions are said to be improving when the reading is higher than 50.0 and deteriorating when it is below.
The index study stated that “strong cost pressures meant that firms operating in the Nigerian private sector continued to be under pressure in September.”
Although new order growth accelerated, supporting a resurgence in economic activity, it was noted that rates of expansion in each were still quite modest.
“Input prices increased at one of the sharpest rates on record, largely due to exchange rate weakness and higher fuel costs,” it was said.
A survey of 400 businesses from the manufacturing, services, construction, and retail sectors produced the PMI index, which gauges the performance of the private sector.
It is a composite index made up of five separate indexes, with the following weights: new orders (30%), output (25%) employment (20%) suppliers’ delivery times (15%), and stock of goods purchased (10%), with the delivery times index inverted so that it moves in a similar manner.
The PMI index (54.0) for May experienced its strongest rise since the year’s commencement.
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