Business activity in Nigeria fell for the second year in a row as inflationary pressures caused prices to rise sharply for the first time in six months.
According to the latest monthly Purchasing Managers’ Index (PMI) released by Stanbic IBTC Bank on Wednesday, the composite index fell to 49.8 in September from 49.9 in August. A number above 50.0 indicates improvement in business conditions, and a number below 50.0 indicates deterioration.
“Business confidence declined in September, hitting its second-lowest level on record, but only slightly above the series lows recorded in July.”
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This is as inflationary pressures intensified in September, further increasing the challenges facing Nigerian businesses as the third quarter draws to a close.
“Indeed, inflationary pressures intensified in September, with both input costs and output prices rising at the fastest pace in six months.”
“Purchase prices rose rapidly due to a weaker currency and rising costs of fuel, logistics, materials and transportation. Wage inflation was the highest in 18 months, despite efforts by some companies to support the rising cost of living for their employees. “The decline has slowed to a low level,” the report said.
As a result, the report revealed that businesses continue to report challenging demand conditions, primarily due to the inflationary environment.
