Nigeria’s private sector sustained its growth momentum in July, recording a sixth consecutive month of expansion as strong customer demand and a surge in new orders continued to support business activity, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI).
The survey, compiled by S&P Global and endorsed by the National Bureau of Statistics (NBS), showed that the headline PMI stood at 52.5 in July, down slightly from 53.4 in June but remaining above the 50-point threshold that separates expansion from contraction.
Although the pace of growth slowed to its weakest level in three months, the reading indicates that business conditions continued to improve across the private sector.
According to the report, companies recorded another sharp increase in new orders during the month, extending the current growth streak to six months. Businesses attributed the rise to stronger customer demand, the introduction of new products and more competitive pricing strategies.
The increase in new business encouraged firms to raise production, although output growth moderated to its slowest pace since January. Agriculture and manufacturing posted the strongest gains, while services and wholesale and retail trade recorded more modest improvements. Businesses also continued to hire more workers in response to higher demand, but the pace of job creation eased to a three-month low. To meet rising workloads, firms increased purchasing activity and built up inventories in anticipation of future production needs.
However, some businesses reported that logistical challenges delayed project completion, resulting in a slight rise in outstanding work despite improved supplier delivery performance.
The report also pointed to easing inflationary pressures during the month. Both input costs and selling prices increased at slower rates than in June, with purchase cost inflation falling to its lowest level in five months.
Despite the moderation, companies said higher fuel and raw material prices continued to drive up production costs, while staff costs rose at the weakest pace since April.
Businesses also passed on part of the increased costs to customers, although the pace of selling price inflation slowed to its weakest level since February. The agriculture sector recorded the sharpest increase in output prices, while inflation was lowest among service providers.
Looking ahead, businesses remained optimistic about the next 12 months, with nearly half of surveyed firms expecting output to increase. The positive outlook was driven by plans to expand operations, open new branches and strengthen marketing efforts.
However, business confidence eased slightly from the one-year high recorded in June.
The Stanbic IBTC Bank Nigeria PMI is based on responses from about 400 private sector companies across agriculture, manufacturing, construction, mining, wholesale, retail and services. The index is widely regarded as an early indicator of business activity and economic trends.
A PMI reading above 50 signals improving business conditions, while a reading below 50 indicates a deterioration. The July result suggests that despite persistent cost pressures and operational challenges, Nigeria’s private sector continues to show resilience amid gradually improving demand.
The post Stanbic PMI: Private sector grows as inflation pressures ease appeared first on The Sun Nigeria.
<small>Source: The Sun Nigeria — read the original story there.</small>
