Stanbic IBTC PMI Shows Rise in Business Activity First Time in Six Months

It was observed that overall business conditions improved as new orders increased for the second month running and renewed expansions were seen in output, employment and purchasing, though the inflation rate remained elevated.

Business Post reports that in the previous month, the index stood at 49.6 points signalling a solid improvement in the health of the private sector that was the most pronounced since January 2024.

“In line with the increase in economic activity usually associated with the festive season in Nigeria, the private sector activity moved above the 50-point psychological threshold for the first time in six months, settling higher at 52.7 in December from 49.6 in November – its most pronounced improvement since January 2024.

“This improved private sector activity reflects renewed expansions in output, purchasing, and employment level. New orders also increased for the second consecutive month, with the latest increase being the highest since May 2024, reflecting an improvement in consumer demand.

“Nonetheless, while some firms increased employment in response to the higher new orders, others reported having to let staff go due to difficulties paying wages.

“Elsewhere, output (54.8 points vs November: 49.6) ended a five-month sequence of decline, with survey participants linking the rise in activity to increased customer numbers. Growth was recorded across each of the four broad sectors covered by the survey. Meanwhile, input prices remained elevated in December – prices increased across all four monitored sectors, with the most pronounced increase in the manufacturing sector.

“As a result, output prices also remained elevated in December and ticked higher from that seen in November,” the Head of Equity Research West Africa at Stanbic IBTC Bank, Mr Muyiwa Oni, said.

“We maintain our expectation that the broad economy is likely to maintain the Q3:24 growth momentum in Q4:24, supported by a festive-induced increase in economic activity and sustained improvement in crude oil production.

“On balance, we estimate the economy to grow by 3.24% y/y in real terms in Q4:24 and adjust our 2024 growth estimate upward to 3.2% (previously: 3.1%). Over the medium term, some firms were optimistic of improvements in access to funding, helping them to invest in business expansions, while others were hopeful of an improvement in economic conditions in 2025, and a softening of inflationary pressures,” he added.