Nigeria: PMI collapses to record low in April on Covid-19 woes
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) sank from 53.8 in March to 37.1 in April, the lowest reading since data collection began in January 2014. Thus, the PMI plummeted below the 50-threshold that separates improvement from deterioration in business conditions, pointing to a severe contraction of activity in the private sector.
April’s plunge reflected drastic falls in output and new orders, with both falling at unprecedented rates, as the lockdown measures implemented to combat the Covid-19 pandemic led to a sharp retreat in demand. Notably, although workforce numbers were also scaled back, the cuts by firms were only modest. On the price front, input cost inflation accelerated markedly due to the difficulty in securing raw materials, which prompted companies to raise their selling prices again. Lastly, although business confidence eased, there was still expectation of expanding activity in the year ahead.