Nigeria’s Private Sector grows despite employment dip—PMI Reports

Keep up with the latest news and be part of our weekly giveaways and airtime sharing; follow our WhatsApp channel for more updates. Click to Follow us

Nigeria’s private sector continued its impressive streak of growth, marking six consecutive months of expansion in May despite challenges such as elevated inflationary pressures and a dip in employment. According to the latest Stanbic IBTC Purchasing Managers’ Index (PMI), the private sector’s health indicator registered 52.7 in May, down from 54.2 in April but still above the 50.0 no-change mark.

Key Highlights:

For further information, read more details here

– Business Conditions: The PMI report indicates a solid strengthening of business conditions, driven by improved customer demand, higher client numbers, and successful new product launches.

– Sectoral Growth: All four broad sectors covered by the report recorded growth in output, with the wholesale, retail, and manufacturing sectors experiencing the sharpest increases.

– Inflationary Pressures: Purchase costs rose rapidly due to higher raw material prices, currency weakness, and increased transportation costs, leading companies to maintain sharp output prices.

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, noted, “Business conditions remain in the expansionary territory for the sixth consecutive month in May amid continued improvement in customer demand, which is also ensuring businesses launch new products.” However, he added that the pace of improvement slowed relative to April, with some firms suggesting market conditions are softening.

Challenges:

– Employment: Employment fell in May for the first time in six months, attributed to difficulties in paying staff, leading to resignations.

– Operational Challenges: Staff shortages and delays in payments from customers contributed to operational challenges, resulting in a second successive rise in backlogs of work.

Despite these challenges, companies demonstrated optimism and strategic activity, expanding purchasing activity to meet current and future client requirements. Oni added, “Nigeria’s business condition is on course to end the second quarter on a positive momentum, albeit relatively weaker than witnessed in Q1:25.” He expects the Nigerian economy to grow by 3.5% year-on-year in real terms in 2025, supported by lower interest rates and a softer inflation environment.

Please don’t forget to “Allow the notification” so you will be the first to get our gist when we publish it. 
Drop your comment in the section below, and don’t forget to share the post