Stanbic IBTC PMI Shows Increased Business Activities in January

 Stanbic IBTC PMI Shows Increased Business Activities in January

In January, business activities gained momentum in Nigeria, as reflected in the Stanbic IBTC Purchasing Managers’ Index (PMI), which rose to 54.4 from 52.7. The increase was driven by new orders and rates of output.

Key Highlights:

1. Highest Increase in Over a Year: January's PMI increase was the highest in over a year, with a significant rise in new business, marking the largest growth since April 2022.

2. Improvements Across Sectors: All four major sectors included in the survey exhibited improvements in output.

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4. Effects of FX, Inflation, and Transport Costs: Despite the sharp rise in business activity, inflation persisted due to exchange rate problems, high transport costs, and raw material costs. Purchase prices rose at the softest pace in eight months, but inflation remained elevated.

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6. Purchasing Activities and Supply Chain: Businesses increased purchasing activities significantly, resulting in increased stocks of inputs. Faster deliveries from suppliers aided companies in procuring necessary inputs.

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8. Growth in Employment and Staff Cost: Employment grew at a slow pace in January, as some firms reported difficulties in paying staff. Outstanding business and backlogs of work increased slightly, and there was no change in staff costs from December as businesses continued to assist staff with transport.

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10. Input and Output Prices: The rate of output charge inflation remained elevated but eased to an eight-month low at the start of 2024, matching the trend for input prices.

The Stanbic IBTC PMI provides insights into the health and direction of the Nigerian private sector economy, and the positive trends in January indicate increased economic activities, though challenges such as inflation persist.