Employment declined for the second straight month as business activity in Nigeria was unchanged last month, according to the latest Purchasing Managers’ Index (PMI).
The latest monthly PMI by Stanbic IBTC Bank released on Tuesday showed the headline index remained unchanged at 51.0 in March from 51.0 in the previous month. Readings above 50.0 signal an improvement in business conditions, while those below show deterioration.
“The headline PMI was unchanged at 51.0 in March, the joint-lowest in four months. The latest reading pointed to a slight improvement in business conditions during the month, and one that was softer than the series trend,” the index report said.
It said the impact of currency weakness on the Nigerian private sector was evident again in March and that purchase costs rose at the sharpest rate on record, meaning companies increased their selling prices at an unprecedented pace.
“The rate of expansion in business activity ticked higher, but steep price rises acted to limit demand and the pace of new order growth eased to a four-month low. Meanwhile, employment decreased for the second month running,” it added.
The PMI index, which measures the performance of the private sector, is derived from a survey of 400 companies from agriculture, manufacturing, services, construction and retail sectors.
It is a composite index based on five individual indexes with the following weights: new orders (30 percent), output (25 percent), employment (20 percent), suppliers’ delivery times (15 percent), and stock of items purchased (10 percent), with the delivery times index inverted so that it moves in a comparable direction.
According to authors of the report, confidence in the year-ahead outlook for business activity strengthened from the previous month’s record low, but remained relatively weak at the end of the first quarter of the year.
“Price pressures remained elevated in March. The rate of purchase price inflation hit a fresh record high for the second consecutive month, largely due to the impact of currency weakness,” they said.
“There were also some reports of higher transportation costs. Employee pay was also increased in response to cost-of-living pressures, resulting in the sharpest rise in staff costs since last November,” they added.
