Business owners report high prices limiting demand as Nigeria’s PMI remain unchanged in March- Report

Nigeria’s Purchasing Managers’ Index (OMI) remained unchanged at 51.0 for March, indicating no change from previous figures.

The steady index value comes amid reports from business owners who cite the surging prices as a damper on the demand for products and services.

According to the report released by Stanbic IBTC for the Purchasing Managers’ Index (PMI) in March 2024, there was a significant upswing in both the costs of purchasing and the prices of output. This increase has been linked to earlier reports of the naira’s depreciation.

The expansion of businesses reported within the month was mitigated by a notable rise in the prices of goods, which in turn substantially dampened consumer demand.

The March report also highlights that the inflation rate for purchase prices hit a record level for the month. This surge is largely ascribed to the naira’s pronounced depreciation, which set new records in its exchange rate against the US dollar.

Furthermore, business managers have reported increases in transportation costs and employee wages during the month. Notably, the rise in staff wages was the most rapid since November 2023.

The report stated,

  • “The headline PMI was unchanged at 51.0 in March, the joint-lowest in four months. The latest reading pointed to a slight improvement in business conditions during the month, and one that was softer than the series trend.”
  • “Price pressures remained elevated in March. The rate of purchase price inflation hit a fresh record high for the second consecutive month, largely due to the impact of currency weakness. There were also some reports of higher transportation costs. Employee pay was also increased in response to cost-of-living pressures, resulting in the sharpest rise in staff costs since last November.”

Around 69% of business owners who responded to the survey reported increased charges for the month making it the steepest increase in purchase price inflation since the survey started in 2014.

Furthermore, employment dropped even though there were significant levels of employee resignation. However, business owners reported a more positive outlook for the year compared to their opinion in the previous month.

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