Stanbic IBTC, in its Purchasing Managers’ Index (PMI) report, said the nation’s private sector continued on its growth path, while employing more workers in April.
According to the report released on Tuesday, “April data revealed another solid overall expansion in the Nigerian private sector, underpinned by further growth in output and new orders.”
It added, “Firms added to their workforces and inventory holdings in anticipation of greater demand, while vendor performance improved further.” It said also that a rise in headcounts allowed firms to clear their backlogs, with the rate of depletion the secondsharpest in the seven-year history of the survey.
The report, however, noted that inflation was on the rise in the month. “Inflationary pressures continued to build, however, with material shortages contributing to the sharpest overall rate of inflation in the series to date. Firms responded by raising selling prices to protect their profit margins,” it stated.
According to the report, at 52.9 in April, the headline PMI registered a rate of growth that was unchanged from that in March and extended the period of expansion to ten consecutive months.
“Higher domestic demand led to a rise in new orders, with the rate of growth substantial in April. This supported another expansion in output, albeit one that was softer than that in March. Sector data revealed that agriculture posted the fastest rise in output followed by services and manufacturing respectively. Wholesale and retail meanwhile recorded a decline,” the report added. The Stanbic IBTC PMI report stated that to support the sustained growth in output, firms increased their purchasing activity, with the rate of growth the quickest in 14 months.
It stated further, “According to panellists, expectations of higher customer numbers, and business expansion plans fuelled stockpiling efforts. Lead times shortened, meanwhile, with quiet road conditions and increased competition amongst vendors often mentioned.
“Amid efforts to expand output, Nigerian private sector firms added to their headcounts at the start of the second quarter. The rate of growth was solid and the sharpest in nearly three years. A rise in employment also contributed to a marked reduction in backlogs, which fell at the second-sharpest rate on record.
“Elsewhere, price pressures intensified with overall input price inflation quickening to the fastest in the series. Material scarcity in particular, and higher staff costs, were linked to the uptick. Subsequently, firms raised selling prices to protect their profit margins. Finally, sentiment regarding the year ahead remained upbeat, with plans to expand operations and invest in marketing fuelling hopes. That said, expectations were below the longrun series average suggesting uncertainty surrounding the economic impact of COVID-19 weighed on optimism.”
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