Nigeria’s business activity rises first time in six months

Nigeria’s business activities witnessed a notable rebound in December, marking the first expansion in six months, as overall business conditions improved.

The latest monthly PMI by Stanbic IBTC Bank released on Thursday showed the headline index increased to 52.7 in December from 49.6 in November.

This upward movement indicates a renewed expansion in output, employment, and purchasing activities.

It said: “New orders increased for the fourth time in the past five months, with the pace of growth reaching its highest level since May.

“Respondents attributed this surge to improving client demand and rising customer numbers. The sustained growth in new orders translated into a renewed expansion in business activity, breaking a five-month sequence of contraction,” the report disclosed.

The report further revealed that the recovery in business activity occurred despite persistent inflationary pressures.

“Currency weakness and rising fuel and transportation costs drove an increase in purchase prices, which in turn contributed to higher staff costs. Businesses responded by raising output prices at a rapid pace, with the rate of inflation marginally accelerating compared to November,” it said.

In response to the heightened demand, businesses ramped up employment and purchasing activities. Input buying growth enabled firms to accumulate stocks of purchases for the first time in five months.

Companies managed to stay on top of workloads, leading to a marginal reduction in backlogs for the seventh consecutive month, it said.

Business confidence, while slightly improved from a record low in the previous survey period, remained subdued, ranking as the third-lowest on record.

“Some firms linked optimism to expected improvements in access to funding, helping them to invest in business expansions, while others were hopeful of an improvement in economic conditions in 2025, and a softening of inflationary pressures,” the report said.