A new Purchasing Managers’ Index (PMI) indicates that in January 2024, business activity in Nigeria reached its highest level in 13 months.
According to Stanbic IBTC Bank’s most recent monthly PMI, which was made public on Thursday, the headline index increased from 52.7 in December to 54.5 in January. A reading above 50.0 indicates that business conditions have improved, while a reading below 50.0 indicates a decline.
Additionally, the reading reveals that this is the index’s second expansion since November.
According to the research, “the revival in the Nigerian private sector gained impetus at the beginning of 2024, with rates of expansion in output and new orders accelerating sharply.”
The article stated that although purchasing activity increased significantly, the rate of job creation decreased due to staff payment issues. In the meantime, rates of inflation remained high but decreased from December. In actuality, the business environment was strengthening for the first time in more than a year, which increased job backlogs.
The private sector performance index, or PMI, is calculated by surveying 400 businesses in the manufacturing, services, retail, agricultural, and construction industries.
This composite index is composed of five separate indexes, each with a different weight: new orders (30%), output (25%) employment (20%), suppliers’ delivery times (15%), and stock of items purchased (10%). The delivery times index is inverted to ensure that the index moves in a similar direction.
As per the PMI data, panelists reported improving demand in January, which gave impetus to the December-starting recovery in new orders.
“For the biggest growth since April 2022, new business grew substantially. In January, business activity increased for the second consecutive month and at its quickest rate in twenty-one months. The output improved in each of the four major survey-covered sectors, the report stated.”