The Stanbic IBTC Bank Nigeria PMI (Purchasing Managers’ Index) for August 2024 shows that business conditions in the Nigerian private sector were broadly stagnant, with a headline PMI of 49.9, slightly up from 49.2 in July but still below the 50.0 no-change mark.
New orders returned to growth, but the rate of expansion was modest, and business activity fell fractionally for the second consecutive month. Employment continued to increase, and firms worked through outstanding business at a faster pace.
Companies faced sharply rising input costs, with the rate of inflation quickening since July, and increased their selling prices at a faster pace. The stagnation in overall operating conditions was in line with the trend in business activity.
The Nigerian economy grew by 3.19% y/y in Q2:24, with the services sector contributing 69.3% to the real GDP growth rate. However, the non-oil sector remains weak, reflecting elevated interest rates, persistent inflationary pressures, and local currency depreciation.
For H2:24, a moderation in headline inflation is expected to provide some respite for domestic demand, but elevated interest rates and local currency depreciation remain headwinds for the non-oil sector.
