April SMI on lowest level as weaker market conditions weigh on sales

All five individual components of Nigeria’s Sales Managers’ Index (SMI) for the month of April continued on the downward path. The slide in the components, which include the product sales, market growth, prices charged, staffing, and business confidence indexes signalled the slowest pace in the survey history.

According to Ed Jones, chief executive, World Economics, “The latest SMI data pointed to another deceleration in economic activity across Nigeria. Product sales and employment levels declined again during April while market growth reached the lowest level since records began. At the same time, prices continued to rise sharply. All-in-all, the latest data suggests that growth is more likely to weaken further in the second quarter.”

As a reflector of growth of the general marketplace in panellists’ own industry sectors, the Market Growth Index fell for the sixth consecutive month in April to signal a marginal increase in market activity. On the other hand, Product Sales Index, which meters monthly sales achieved by panellists’ own companies, stayed under 50.0 no-change mark for the second month in a row, signalling a stronger contraction in the level of product sales.

The Prices Charged Index was again on the increase in April, lengthening the current level sequence of inflation to 27 months. “Although slightly softer than in the prior month, the general level of prices remained sharp and well above the long-term series average. The weakening of the Naira versus the US dollar was cited by panel members as one factor behind the rise in price levels,” noted World Economics in the report.

Employment levels in contrast, declined for the second consecutive month in April, reflecting the trend in sales and market growth. The Staffing Index was at the lowest level in history of the survey with panellists contemplating downsizing policies to cut costs.

Business Confidence Index also saw a thirteen-month decline, easing business expectations levels for the sixth month running in April. Panellists blamed this to declining demand conditions, rising unemployment, high inflation, low commodity prices and unfavourable exchange rate conditions.