The latest report from Stanbic IBTC on Nigeria’s Purchasing Managers’ Index (PMI) reveals a PMI reading of 51.7 for July, marking a slight dip of 1.5 index points from June’s figure of 53.2. While this reading still indicates continued expansion in business activity, the number which is a decline compared to June can be attributed to the notable rise in input costs, which reached their fastest increase since 2014, analysts said.
Delving into the sub-indexes, both output growth and new orders have experienced a slowdown, reaching their most sluggish rates since the sector’s recovery from the cash crisis earlier this year. There is an anticipation that inflation could trend toward the 27% year-on-year mark by the end of the year.
This projection considers the cascading effects of higher prices in transportation and food, factors poised to contribute to the overall inflationary pressures significantly. Analysts have pointed out a robust negative relationship (up to 80%) between average input prices and real GDP in Nigeria’s PMI trend.
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