Due to rising prices, business activity in Nigeria reaches a 5-month low. According to a new Purchasing Managers’ Index (PMI), the biggest economy in Africa is seeing its weakest level of business activity in five months.

    On Friday, Stanbic IBTC Bank released its most recent monthly PMI, which revealed that the headline index fell from 51.7 in July to 50.2 in August. Business conditions are said to be improving when the reading is higher than 50.0 and deteriorating when it is below.

    Midway through the third quarter of the year, “Nigerian private sector business activity dipped into contraction as severe and strengthening price pressures acted to diminish demand,” the index report stated.

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    It showed that since the survey’s start roughly 10 years ago, both total input costs and output charges have climbed to the greatest extent. “Again, inflation reflected higher travel expenses brought on by the withdrawal of the fuel subsidy as well as currency weakening. Delays in supplier delivery were also brought on by rising transportation expenses, it continued.

    Nigeria tax index
    Nigeria tax index

    The survey showed that the headline PMI for August was at its lowest level in the past five months of steadily improving business conditions. “The index only indicated a slight monthly improvement in the health of the private sector.”

    400 businesses from the manufacturing, services, construction, and retail sectors were surveyed to create 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.

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