April 2024 saw a slight uptick in the Purchasing Managers’ Index (PMI) to 51.1 due to a slowing in the rate of pricing and production fee increases. According to the Stanbic IBTC PMI survey report, which was made public yesterday, inflationary pressures in the Nigerian private sector decreased in April compared to March.
The headline PMI increased marginally from 51.0 in March 2024 to 51.1 in April 2024, indicating a fifth consecutive month of improvement in the business environment for the nation’s private sector. PMI numbers above 50.0 indicate that business conditions have improved from the prior month, while readings below 50.0 indicate a decline.
As to the report, there was a restrained growth in output and new orders due to the elevated rates of inflation, which also caused several firms to reduce employment.
The naira’s fluctuations and the ensuing effect on prices continued to have a significant impact on the conditions for businesses. Although the rate of increase in output charges and purchase prices has slowed significantly over the last month due to an improvement in the value of the currency, inflationary pressures have not decreased significantly. In less than a year, the most recent increase in selling prices was the mildest. In every one of the four major survey-covered sectors, price rises were slower.
The amount of inflationary pressures continued to constrain the rates of growth in output and new orders in April, both of which remained constant from the previous month, even though price rises were less noticeable than in March.
“Output increased significantly in both manufacturing and agriculture, and wholesale and retail activities increased as well. Conversely, there was a decline in service activity.
Businesses observed a slower increase in staff costs in April in addition to a slowdown in the inflation of procurement costs. Employee costs rose slightly, at the slowest rate in the previous thirteen months. However, several businesses had to cut employment due to financial constraints. However, hiring elsewhere almost offset this, so after declines in February and March, overall employment barely changed in April.
Inflation
The persistent lack of job growth during a period of increasing new orders resulted in work backlogs growing for the second consecutive month. Problems getting materials because of increased costs and problems getting paid for orders from clients also contributed to delays. At the beginning of the second quarter of the year, “growing new orders led to modest expansions in purchasing activity and inventory holdings,” the report continued.
Source: vanguardngr.com
