According to the Purchasing Managers’ Index, PMI, report published by the Stanbic IBTC Bank, intense price pressures slowed the rate of growth in the private sector of Nigeria in July 2023.
The PMI dropped to 51.7 in July from 53.2 in June, and the sharp rise in overall input prices has been blamed for the dip.
The survey’s headline statistic is the Purchasing Managers’ Index (PMI). Readings above 50.0 suggest an improvement over the prior month in business conditions, while readings below 50.0 denote a decline.
According to the paper, “Overall input costs increased at a rate unparalleled in the more than nine and a half years of data gathering, and selling prices jumped quickly as a result. As the second half of the year began, the growth of both new orders and company activity slowed due to rising pricing pressures.
“In the meantime, corporate optimism reached a new low. However, there was more good news about employment, as the rate of job creation accelerated to the fastest level since January. Despite this, the score fell from 53.2 in June to 51.7 in July, indicating the least dramatic improvement in operational circumstances in the current expansionary cycle.
“The softer improvement in the health of the private sector reflected trends in output and new orders during July,” the report continued. Following the cash crisis at the beginning of the year, growth rates in both cases decreased to their lowest points in the subsequent recoveries to expansion.
“While some businesses reported being able to gain new contracts amid an increase in the number of customers, others underlined the detrimental effect that rising costs have had on demand.
“Data for July indicated a sharp rise in input prices overall, with the rate of inflation the joint-fastest since the series’ inception in January 2014, equal to that reported in November 2021,” according to the report.
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