Nigeria’s purchasing index rises in May as high prices curtail demand

Despite high prices which has continued to curtail demand, Nigeria’s Stanbic Purchasing Managers’ Index (PMI) rose to 52.1 in May, the highest since January 2024 when the headline PM! Reached 54.5

According to the report, the rise in new orders continued for the sixth consecutive month as all sectors saw growth, especially in the manufacturing sector.

It stated, “May data pointed to a pick-up in growth in the Nigerian private sector, with both output and new orders increasing at sharper rates than in April. Rates of expansion remained slower than the respective series averages, however, as high prices continued to limit demand.”

“The headline PMI posted 52.1 in May, up from 51.1 in April and the highest since January. The latest reading signalled a modest improvement in business conditions in the Nigerian private sector, but one that was still less pronounced than the historical trend. New orders increased solidly in May, extending the current sequence of growth to six months.”

Furthermore, currency weakness resulted in an increase in purchasing costs as the rate of inflation dropped to a one year low in May. Businesses also saw high prices of input materials inhibited efforts to complete projects.

In terms of outlook for the year, the confidence of business owners was at its lowest since February with only about 43 per cent reporting having a positive outlook for the remaining months of the year.

Speaking on the report, the Head of Equities Research at Stanbic IBTC Nigeria, Muyiwa Oni said the bank expects demand to remain weak in comparison to the historical average but noted that inflation might peak in May.