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Nigerian private sector growth hits 26-month high

Staff Writer | September 6, 2017
August’s PMI survey signalled the greatest improvement in operating conditions in Nigeria for over two years.
Nigerian private sector
Africa   Stanbic IBTC Bank Nigeria PMI
Strong growth in output, new orders and a marginal uptick in job creation were all key components behind the most recent expansion.

Meanwhile, average cost burdens faced by Nigerian businesses rose in August, albeit at a more subdued pace than recorded in July.

The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

At 55.0 in August, the headline PMI rose above July’s reading of 54.8.

The latest seasonally adjusted data indicated a steep rate of growth in the Nigerian private sector, with the most recent figure being above the survey’s near four-year average.

Furthermore, August data extended the sequence of expansion seen throughout 2017 so far.

Growth of business activity in Nigeria accelerated to its fastest rate of expansion in 32 months in August.

Output growth was sharp overall and well above the series’ long run average.

Anecdotal evidence suggested that strong client demand led to rising output requirements in the latest survey.

Growth in new orders eased slightly in August, but the pace of expansion remained strong overall, however.

According to the survey data, client demand was mostly in the domestic market, as new export orders contracted for the second month running in August.

An uptick in job creation was registered in August.

Furthermore, the latest improvement of employment levels in the Nigerian private sector extended the current sequence of employment growth to four months.

On the price front, there was a marginal softening in input price inflation during August.

Costs continued to rise at a modest rate.

The survey’s price measures signalled that cost increases were derived from non-staff costs, as wages remained relatively stagnant.

Output charge inflation in the Nigerian private sector increased fractionally in August, but remained below the series’ historical average.

Supplier delivery times worsened for the first time in 13 months during August, with the rate at which vendor performance deteriorated being modest overall.

There were some reports of worsening road conditions.

Finally, buying activity rose markedly in August, albeit to a lesser extent than that recorded in July.

Panellists reported that they increased their purchasing activity in response to rising output requirements.