Nigeria: PMI climbs to positive territory in July
August 5, 2020
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) climbed from 46.4 in June to 50.4 in July. As a result, the PMI crossed above the 50-threshold that separates improvement from deterioration in business conditions from the prior month, pointing to mild growth of activity in the private sector.
July’s improvement reflected both output and new orders increasing for the first time in four months amid strengthening demand. That said, growth in the surveyed month was marginal. In addition, excess capacity persisted, reflecting the severity of the Covid-19 downturn of the previous months, which led firms to cut jobs for the fourth month running. On the price front, input cost inflation jumped to its highest in survey history due to currency weakness and raw material shortages, prompting companies to hike selling prices steeply. Lastly, business confidence bounced back from June’s record low.
Author: Javier Colato, Economist