Purchasing Managers’ Index (PMI) recent report has indicated that there were tentative signs of improvement in the Nigerian private sector during the final month of 2024.
The report explained that overall business conditions improved as new orders increased for the second month running and renewed expansions were seen in output, employment and purchasing. That said, rates of inflation remained elevated.
The headline figure derived from the survey showed that PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The headline PMI moved back above the 50.0 no-change mark for the first time in six months during December. At 52.7, the index was up from 49.6 in November and signaled a solid improvement in the health of the private sector that was the most pronounced since January 2024.
The report said new orders for goods and services increased for the fourth time in the past five months, with the pace of expansion quickening to the fastest since May. Respondents noted improving client demand and rising customer numbers.
According to the report, sustained growth of new orders led to a renewed expansion of business activity in December, thereby ending a five- month sequence of contraction. All four broad sectors signaled rising output at the end of 2024.
“Companies also responded to higher new orders by recording fresh rises in both employment and purchasing activity. Growth of input buying helped firms to accumulate stocks of purchases for the first time in five months.
Firms were able to keep on top of workloads and depleted backlogs for the seventh month running, albeit marginally,” the report said.
There were some signs of capacity pressures emerging in supply chains, however, with lead times shortening only fractionally and to the least extent since August 2023.
“While prompt payments and competition among suppliers meant that lead times continued to shorten, poor road condition and higher demand for inputs caused delays in some cases. Improving trends across the private sector were recorded in spite of ongoing strong inflationary pressures.”
Source: @TheINDEPENDENT
