By Peter Egwuatu

The October 2021 economic data has indicated some improvements in business conditions in Nigeria’s private sector with output, new orders and buying activity rising.

A report by Stanbic IBTC Bank Plc released noted that the headline Purchasing Managers’ Index, PMI, improved to 54.1 in October from 52.3 in September, indicating a sixteenth successive monthly expansion.

PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

“Sector data indicated that all four subsectors saw faster increases in output. Manufacturers registered the steepest expansion, followed by wholesale & retail, services and agriculture, respectively” the report noted.

The report explained further that amid reports of improved market conditions and rising client requirements, new orders continued to expand.

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It stated: “Firms reportedly had sufficient capacity to complete incoming new orders. Despite this, companies added to their headcounts, although the rate of growth was only modest.

“Overall input prices rose substantially, which firms linked to unfavourable exchange rate movements as well as higher raw material, staff, and transportation costs. In fact, purchase cost inflation quickened to a fresh series high.

“Firms opted to pass on part of the burden to clients by lifting their selling charges, which they did so at the third quickest rate in the series history.

“Accelerating input costs led firms to protect against future price hikes by adding to their stockpiles.

“Concerns surrounding prices fed through to sentiment with confidence moderating in October and registering below the average for 2021 so far.

“Nevertheless, firms remained hopeful that greater investment will encourage output growth in the year ahead”.

Vanguard News Nigeria