Monday, September 8, 2025
24.5 C
Lagos

Stanbic IBTC Bank: Nigeria PMI Dips to 4-Month Low at Start of 2022

The opening month of 2022 revealed a solid expansion in Nigeria’s private sector. Output continued to rise at a robust pace thanks to larger workforces as well as supportive domestic and international demand conditions.

However, cash shortages weighed on new orders, which rose at the softest rate for a year-and-a-half. Nevertheless, firms remained committed to raising output and stockpiled inputs accordingly, while sentiment improved to an 11-month high. Cost pressures remained sharp in January, but purchase price inflation eased notably from December’s previous peak.

The headline figure derived from the survey is the Purchasing Managers’ Index (PMI). Stanbic IBTC Bank noted that readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. At 53.7 in January, down from 56.4 in December, the latest expansion pointed to a softer, yet solid, improvement in business conditions.

Expansions have now been seen in each of the last 19 months, with the latest uptick the softest since September. Central to the moderation was a notable slowdown in new order growth. Total new business rose at the softest pace in 18 months with panel comments mentioning that cash shortages and high prices weighed on new order growth.

With new order growth easing in January, firms raised their output levels at a softer pace. The rate of growth was still robust, however, and above the long-run series average. Sub-sector data revealed expansions across the board, although agriculture recorded by far the strongest increase. Manufacturing, wholesale & retail and services followed, respectively. Sentiment improved to an 11-month high during the month amid plans to expand operations.

As a result, firms raised their headcounts marginally which contributed to a sharp reduction in backlogs. Lead times continued to improve in January, but to the weakest extent since April 2020. The resurgence of COVID-19 cases and tighter restrictions in international markets were often mentioned as factors that weighed on vendor performance.

Meanwhile, a sustained period of output and new order growth encouraged advance ordering strategies. There was also an indication that firms added to stockpiles to protect against future price hikes. Both purchasing activity and input inventories rose at robust, albeit softer rates.

Rising wage and raw material prices led to another increase in overall input costs. Unfavorable exchange rate movements also drove up expenses. Consequently, firms increased selling charges, but the rate of increase moderated notably.

 

spot_img
spot_img

Hot this week

Nigeria, Brazil Central Banks Deepen Economic, Financial Co-operation

Nigeria’s Central Bank Governor, Olayemi Cardoso, has held talks...

Ecobank Nigeria to Host Second Edition of Design & Build, Showcasing Premier Innovators in Design, Construction

Ecobank Nigeria, a subsidiary of the leading pan-African banking...

Expert: Fintech, Financial Inclusion Critical for Sustainable Growth of Nigerian Economy

A renowned economist, Dr. Biodun Adedipe, the Chief Consultant/CEO,...

Sterling Bank Marks One Year of Africa’s Groundbreaking Core Banking System

Number one Best Workplace in Banking in Nigeria and...

Topics

IATA Forecasts 8.2bn Air Passengers by 2037

The International Air Transport Association (IATA) revealed that present...

Stanbic IBTC: Most Outstanding Bank Supporting Women-Owned Businesses

Stanbic IBTC Bank Limited, a subsidiary of Stanbic IBTC...

Ericsson Report: 310m LTE Subscriptions in Sub-Saharan Africa by 2023

LTE subscriptions will expand by 47 percent from...

NPA Approves New Structure to Drive Efficiency

The Board of the Nigerian Ports Authority (NPA) has...

Court Orders Seplat to Hold AGM

Lagos and London – 9 May 2023: Seplat Energy...

Global Telcos May Dump Africa over Profit Threat

Africa may well be the next frontier for growth...

University of Retirement: Meet Members of Faculty for 2025 Inspenonline Retirement Summit

Former Commissioner for Insurance/Director FBS Reinsurance Limited, Fola Daniel,...

Global ICT Capacity Building Symposium for Nairobi

Nairobi is set to host ITU’s Global ICT Capacity...
spot_img

Related Articles

Popular Categories

spot_imgspot_img