Business activity in Nigeria rose to the highest in four months in May 2024 as inflationary pressures eased to a one-year low, a new Purchasing Managers’ Index (PMI) has shown.
The latest monthly PMI by Stanbic IBTC Bank released on Monday showed the headline index improved to 52.1 from 51.1 in the previous month. Readings above 50.0 signal an improvement in business conditions, while those below show deterioration.
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“May data pointed to a pick-up in growth in the Nigerian private sector, with both output and new orders increasing at sharper rates than in April. Rates of expansion remained slower than the respective series averages, however, as high prices continued to limit demand,” the report said.
It said there were further signs of inflation leveling off, with both purchase costs and selling prices rising at the slowest rates for a year.
“New orders increased solidly in May, extending the current sequence of growth to six months. Business activity was also up and to the largest extent since January. Growth was recorded across all four monitored sectors, with the sharpest rise in manufacturing,” the report 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.
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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.
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