Report: Private Sector Productivity Rise Substantially in February

 

Dike Onwuamaeze
The Purchasing Manager Index (PMI) of the StanbicIBTC recorded its strongest performance for over two years in February 2022.

The PMI revealed substantial improvement in business conditions for the Nigerian private sector in the month of February 2022, which was characterized by quicker expansions in output and new orders, improvement in employment as well as intensified overall input price inflation.

It said: “At 57.3 in February, up sharply from 53.7 in January, the latest expansion pointed to a robust overall improvement in business conditions. Moreover, the latest figure signaled the strongest expansion since November 2019.
“A key driver of growth was the joint-quickest rise in new orders for over two years. Firms mentioned a general improvement in demand from both domestic and international markets.

“To cater for higher orders, firms lifted their output levels, and for the fifteenth month in succession.”
It should be noted that readings above 50.0 signal an improvement in business conditions on the previous month while readings below 50.0 show deterioration.

The report said that firms were hopeful that higher investments and customer numbers would support output growth over the course of the coming year.

The PMI report said that its sub-sector data revealed trading activities was the highest performer during the period under review as “a broad-based expansion with wholesale and retail recording the strongest increase. Services, agriculture and manufacturing followed, respectively.”

The improved productivity, according to the report, also led companies to raise their staffing levels in February, which they did so at a rate that was the quickest since last July 2021.

“As a result, wages rose at the second-quickest rate in the series history. Backlogs meanwhile fell sharply.”

It added that “sustained periods of output growth as well as improving demand for Nigerian products and services led to higher levels of input buying. In a bid to meet future orders, firms added to their inventories.

“Vendor performance continued to improve during the month as a result of increased competition amongst vendors, advance payments and timely order requests.”

The PMI said that the effect of the favourable demand condition underpinned optimism in February as “firms that foresee a rise in output expect business expansions, higher client numbers and greater investment over the coming 12 months.”