Stanbic IBTC Bank Nigeria PMI Dips To 17-Month Low In June

The Nigerian private sector remained in growth territory at the end of the second quarter, although recent challenges around cash shortages led to weaker new order growth and a renewed decline in output.

As a result, business conditions improved at the weakest rate for almost a-year-and-a-half. Companies responded by raising their staffing levels, purchases and stocks of inputs at softer rates in June.

On the price front, steep cost pressures persisted with overall input price inflation quickening to a four-month high.

The headline figure derived from the survey is the Purchasing Managers’ IndexTM (PMI®).

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

At 50.9 in June, down from 53.9 in May, the headline PMI signalled a twenty-fourth successive monthly improvement in business conditions in Nigeria's private sector.

That said, the latest result was indicative of the weakest improvement for 17 months.

Central to the moderation was a renewed contraction in output which fell for the first time in 19 months. Although marginal overall, the latest fall contrasted with sharp expansions in recent months.

Firms overwhelmingly blamed weaker inflows of new work, but there were also mentions of cash shortages.