Nigeria’s factory activity in December expanded at the fastest pace since January 2024, thanks to growth in output, and acceleration in new orders and purchases, the Stanbic IBTC Purchasing Managers Index shows.
The country’s manufacturing sector closed out 2024 on a positive trajectory, with the Purchasing Managers’ Index (PMI) rising to 52.70 points in December from 49.6 points in November, above the 50 no-change mark for the second month running and signalling a solid improvement in the health of the private sector.
This uptick signals a moderate expansion in manufacturing activities, pointing to a promising outlook for the sector in the new year.
Read also:Nigeria’s business activity rises first time in six months
Despite accelerating inflation, the surge in demand during the festive season was a key driver of the improved PMI, leading to growth in new orders and sustained employment and output growth.
“In December, business activity in Nigeria’s private sector experienced growth after five months of decline,” the report said.
“The expansion was significant and the fastest since January 2024. This improvement was attributed to an increase in customers,” it explained, adding that all four main sectors in the survey recorded growth.
This outcome aligns with earlier forecasts, underscoring the resilience of Nigeria’s manufacturing sector.
According to the report, December data showed a significant increase in new orders at companies in Nigeria, with the latest rise being the sharpest since May.
“New business has now increased in four of the past five months and the rise in new orders reflects improvements in customer demand,” the report added.
The report stated that purchase prices rose sharply on weaker exchange rates and higher fuel and transportation costs.
The report also adds that the country’s inflation rate remained among the strongest in the series history despite easing slightly for the third consecutive month.
“The report added that employment levels rose for the seventh time in eight months, recovering from a slight drop in November.”
Read also: Nigeria business activity falls for the fifth straight month as inflation soars
“The pace of job creation was the fastest since August. Some companies hired more staff to handle increased orders, while others had to let employees go because of difficulty paying wages.”
Experts are optimistic about the implications of the positive PMI, suggesting that it signals growth in the manufacturing sector, which will contribute to the fourth quarter of 2024 GDP growth and sustain it above three percent.
This development is a welcome boost to Nigeria’s economy, which has faced various challenges recently.
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