Employment levels in firms jumped as workload expanded
Nigeria’s Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, rose in December at the swiftest speed only once surpassed since official record began nine years ago.
The latest PMI issued on Tuesday echoed concerns in the broader economy about Nigeria’s defiant inflation, which is currently at its ten-month high.
Vulnerabilities in the exchange rate of the naira to the US dollar were highlighted as pivots driving costs up by Stanbic IBTC Bank, which runs the survey monthly, in partnership with London-based market intelligence powerhouse S&P Global Platts and the National Bureau of Statistics.
“In near term, inflation will likely remain elevated, significantly above the central bank’s target range of 6% -9%, which would keep the monetary policy authorities hawkish aiming at containing surging price levels,” Muyiwa Awe, who heads Stanbic IBTC Bank’s West Africa equity research unit, said in the comment accompanying the document.
Prices also saw fresh pressures in December when festivities leading up to the Christmas holiday and beyond usually stoke consumer spending and spur large new orders at factories, strengthening activity.
“As a result of the higher level of demand, firms increased business conditions and output levels across various sectors (agriculture, manufacturing, wholesale & retail and services sectors),” Mr Awe said.
The PMI reading for December was 54.6 compared with 54.3 one month prior. A reading below 50 is a marker of contraction but any reading above that threshold suggests growth.
A key source of economic data for investors, analysts and decision makers, PMI shows the trajectory of growth in the manufacturing and services sectors.
Sectors comprising manufacturing, services, agriculture and wholesale & retail all reported growth in output.
Employment levels in firms jumped within the period on the need for new recruitment to relieve existing staff as workload expanded.
Meanwhile, business confidence saw little improvement, with some of the firms attributing their optimism to “planned investment and business expansions”.