Nigeria: PMI crawls back up from record low but remains deep in the red in May
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) climbed from its record low of 37.1 in April to 40.7 in May. Nevertheless, the PMI remained deeply entrenched under the 50-threshold that separates improvement from deterioration in business conditions, pointing to a severe contraction of activity in the private sector.
May’s increase reflected slightly weaker falls in output and new orders compared to their unprecedented declines in the previous month as the impact from Covid-19 and related lockdown measures continued to take their toll on demand conditions. Meanwhile, employment fell only fractionally as nearly the entirety of surveyed firms kept their staffing levels unchanged. On the price front, input cost inflation spiked to another record high due to currency weakness, higher logistics costs and lack of materials, which prompted companies to pass this higher burden onto customers by raising selling prices sharply. Lastly, business confidence dropped to its lowest since 2017-end.