Nigeria: PMI swings into contraction in July
The Stanbic IBTC Bank Nigeria PMI fell to 49.2 in July from 50.1 in June. As a result, the index moved below the 50.0 no-change threshold, signaling a deterioration in private-sector operating conditions compared to the previous month.
The decline in the PMI was primarily due to the first reductions in business activity and new orders since November last year, but both saw only modest declines. This downturn in the health of the Nigerian private sector was partly attributed to steep price pressures impacting demand. Despite these challenges, employment continued to rise, with job creation reaching its highest rate in 2024, reflecting companies’ efforts to expand staffing even amid declining output and new orders.
Meanwhile, price pressures remained a significant concern, with both input costs and selling prices continuing to rise rapidly. However, the pace of output price inflation softened, as some companies lowered their charges in an effort to secure sales. Lastly, business sentiment hit a new record low, reflecting the negative impact of sharp price increases on customer demand and overall business confidence. Despite this, companies remained optimistic about future output, driven by expansion plans and efforts to open more branches and increase exports.