Saturday, 02 December 2023 05:06

Nigeria’s inflation pushes manufacturing into contraction for second consecutive month - Report

Rate this item
(0 votes)

Nigeria’s manufacturing activity shrank for the second straight month in November, affected by rising price levels that kept customers at bay.

This is contained in the Stanbic IBTC Bank Nigeria Purchasing Manager Index (PMI) released Friday.

PMIs track the prevailing direction of economic trends in manufacturing and service sectors, providing credible data on business conditions to analysts, decision-makers and investors.

A reading above 50 indicates an improvement, while that below that threshold means a contraction.

The report said Friday that the country’s PMI for November was 48, down from 49.1 the month before.

New orders and output both receded in the face of surging purchase prices, which accelerated at the quickest rate in two years, spurred by exchange rate volatility and jumps in fuel and material costs.

All that happened as Nigeria’s inflation hit its most elevated level in 18 years, setting business activity up for its sharpest decline since the cash crunch early in the year.

“The heightened inflationary environment appears to depress consumer demand considerably as lack of customers was a reason for the reduced output,” Muyiwa Oni, head of Equity Research West Africa at Stanbic IBTC Bank, said.

“Sharp increases in prices deterred clients from making new orders during November. As a result, new business decreased for the second consecutive month.”

Wholesale and retail companies were most hurt by the slump. Meanwhile, agriculture was the only sector that reported an expansion in output.

Companies jacked up selling prices significantly again apparently in response to soaring input costs, passing costs on to customers. That could increase the inflation rate for the month further when the consumer price index is issued later in December.

Stanbic IBTC Bank Nigeria PMI observed that roughly half of the purchasing managers it surveyed increased their charges during the month.

Business confidence was at its lowest ebb since July, caused by anxieties around the effects of inflationary pressure on demand.

On the upside, staffing levels increased for the seventh successive month in November.

“Wages also increased as companies looked to help staff with higher living and transportation costs,” the document said.

Another bright spot was that business investment and plans to start new plants strengthened the hope that output would improve in the year ahead.



March 05, 2024

Want to hire good employees? Look for 4 positive work traits

Hiring the wrong person is costly on every front: money, time, energy, and the well-being…
February 26, 2024

Afenifere opposes curtailing Yorubas’ right to protest against Tinubu's harsh economic policies

PRESS RELEASE Afenifere has distanced itself from the call by some renegade Afenifere members for…
March 02, 2024

I’ll tell you the secret of cancer - Caitlin Flanagan

It’s been almost 20 years since my diagnosis, and I’ve learned quite a bit. Are…
March 02, 2024

Man tries to hide stolen horse in his third-floor apartment

A 19-year-old man faces three months to five years in prison for stealing a horse…
March 05, 2024

Banks enable 70 percent of financial crimes in Nigeria - EFCC

Economic and Financial Crimes Commission, on Monday, indicted banks as being linked to about 70…
March 05, 2024

Here’s the latest as Israel-Hamas war enters Day 151

UN envoy says 'reasonable grounds' to believe Hamas committed sexual violence on Oct. 7 The…
March 03, 2024

Scientists may have finally solved the mystery of consciousness. Their discoveries are troubling

Throughout history, attempts by mere mortals to plumb the inner recesses of the soul have…
March 02, 2024

Super Eagles coach Peseiro leaves at end of contract

Nigeria's Portuguese coach Jose Peseiro said on Friday he had left the job only weeks…

NEWSSCROLL TEAM: 'Sina Kawonise: Publisher/Editor-in-Chief; Prof Wale Are Olaitan: Editorial Consultant; Femi Kawonise: Head, Production & Administration; Afolabi Ajibola: IT Manager;
Contact Us: [email protected] Tel/WhatsApp: +234 811 395 4049

Copyright © 2015 - 2024 NewsScroll. All rights reserved.