Employment drops for first time in seven months in Nigeria – Report 

Employment in the private sector declined in November, ending a six-month streak of job creation.

The reduction in staffing levels was primarily observed in the services sector, though the fall was marginal.

This decline reflects the ongoing challenges faced by businesses in the face of rising costs and weakening demand. Companies also reduced their purchasing activity and inventory levels, further illustrating the cautious approach adopted amid inflationary pressures.

The report read: “Employment was also down, thereby ending a six-month sequence of job creation. The pace of reduction was only marginal, however, as the overall fall in staffing levels was limited to just services firms.” 

In November, new orders returned to growth, following a sharp decline in October. However, demand remained subdued as high prices continued to deter customers. Inflationary pressures, driven by a weakened currency and rising costs for fuel and raw materials, continued to weigh heavily on businesses.

As a result, output in the private sector fell for the fifth consecutive month, although the pace of decline slowed compared to previous months.

The report also highlighted persistent inflationary pressures, subdued business activity, and a reduction in output, despite a slight recovery in new orders.

The headline PMI, which tracks business conditions, stood at 49.6 in November, signaling a marginal contraction in the economy. Although this was an improvement from October’s reading of 46.9, it marked the fifth consecutive month of negative growth.

A reading below 50.0 indicates a deterioration in business conditions, while a figure above 50.0 signals expansion.

The report noted that input costs continued to rise sharply in November, driven by inflationary pressures linked to higher energy prices and raw material costs. Staff costs also increased, as businesses adjusted wages to help employees cope with rising living and transportation expenses.

To offset these increasing costs, companies raised their selling prices at a substantial rate, although the pace of inflation slowed slightly compared to October.

Sector data showed mixed results across the Nigerian economy in November. While agriculture and manufacturing saw modest increases in output, the wholesale & retail and services sectors continued to contract. The subdued demand environment, coupled with elevated input prices, weighed on business performance across several industries.

Despite the challenges, supply chain conditions improved slightly in November. Firms reported shorter delivery times for inputs, driven by less congestion on the roads, prompt payments, and competition among suppliers. However, business confidence in the outlook for the coming months hit a record low, with firms citing uncertainty over continued inflationary pressures and weak demand.