Business activity in Nigeria is at its lowest in 19 months, fuelled by intense cost pressure and a weak naira, Purchasing Managers Index (PMI) for October reveals.
The most recent monthly PMI by Stanbic IBTC Bank, released on Friday, indicated that the headline index decreased to 46.9 in October from 49.8 in September, marking the lowest level since March 2023.
The PMI reading above 50.0 signals an improvement in business conditions, while those below show deterioration.
The report disclosed that the decline is been fueled primarily by the third-highest rise in overall input costs.
Read also: Business activities fall again as prices rise at sharpest rate in six months
“This surge reflects a weak naira, high transportation fees, and rising fuel prices that have severely squeezed businesses’ purchasing power. As a result, Nigerian firms have been forced to raise their selling prices at one of the fastest rates in history, passing rising costs on to consumers and worsening inflationary pressures,” the report said.
The rapid rise in prices led to a marked drop in new orders, with businesses facing the sharpest contraction in demand since March 2023.
Additionally, many firms scaled back purchasing activity, and stocks of inputs dropped for the third month in a row, further stressing supply chains.
Despite the challenges, staffing levels rose slightly in October, marking a sixth consecutive month of modest employment growth.
“Some companies have resorted to hiring short-term staff to keep up with production schedules, while others have trimmed their workforces to control costs,” it said.
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