The Nigerian private sector returned to expansion during July, following three successive months of decline, the Nigeria Purchasing Managers’ Index July report has said.
Both business activity and new orders increased, but the severity of the coronavirus disease 2019 (COVID-19) downturn meant that spare capacity remained evident, leading to a further reduction in employment, the report released yesterday by Stanbic IBTC.
It said the recent surge in prices extended into the second half of the year, with overall input prices rising at the sharpest pace in the survey’s history.
In response, firms also raised their output prices at the fastest rate since the survey began in January 2014.
The headline PMI posted 50.4 in July, up from 46.4 in June and above the 50.0 no-change mark for the first time since March.
“The reading signalled only a slight improvement in business conditions following a severe downturn due to the COVID-19 pandemic.
“Signs of improving demand were central to a strengthening of business conditions. New orders increased for the first time in four months. Business activity also returned to growth for the first time since March on the back of higher new orders and an easing of the lockdown,” the report said.
An economist, Gbolahan Taiwo said: “Business activities in the Nigerian private sector returned to expansion territory for the first time since March as output and new orders improved. Although we expect business activities in the Nigerian private sector will continue to improve over the coming months, the overall economy will likely still fall into a recession.”
