Nigeria: PMI rises again in June but remains in contractionary territory
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose from 40.7 in May to 46.4 in June. Nevertheless, the PMI remained below the 50-threshold that separates improvement from deterioration in business conditions, pointing to a contraction of activity in the private sector.
June’s improvement reflected softer falls in output and new orders amid the loosening of Covid-19 containment measures. That said, operating conditions remained challenging amid shortfalls in demand, which concerningly, prompted firms to cut jobs at the fastest pace since the survey began in January 2014 as they struggled to keep workers on payroll. On the price front, although staff costs declined, purchase costs spiked due to currency weakness and supply shortages, leading companies to hike selling prices sharply. Lastly, business confidence fell to its lowest since the inception of the survey.