Despite COVID-19, private sector reports growth in April – Report
Despite disruptions from COVID-19, private sector have continued to experience sustained growth, a Purchasing Managers Index (PMI) report by Stanbic IBTC bank has revealed.
According to the report, the output for the private sector in April maintained positive growth.
Part of the report reads: “Firms added to their workforces and inventory holdings in anticipation of greater demand, while vendor performance improved further. A rise in headcounts allowed firms to clear their backlogs, with the rate of depletion the second-sharpest in the seven-year history of the survey.
“Inflationary pressures continued to build however, with material shortages contributing to the sharpest overall rate of inflation in the series to date. Firms responded by raising selling prices to protect their profit margins.
“At 52.9 in April, the headline PMI registered a rate of growth that was unchanged from that in March and extended the period of expansion to ten consecutive months.
“Higher domestic demand led to a rise in new orders, with the rate of growth substantial in April. This supported another expansion in output, albeit one that was softer than that in March.
Sector data revealed that agriculture posted the fastest rise in output followed by services and manufacturing respectively. Wholesale & retail meanwhile recorded a decline.
To support the sustained growth in output, firms increased their purchasing activity, with the rate of growth the quickest in 14 months.”
According to the report, expectations of higher customer numbers, and business expansion plans fuelled stockpiling efforts.
It added that amid efforts to expand output, Nigerian private sector firms added to their headcounts at the start of the second quarter.
It said the rate of growth was solid and the sharpest in nearly three years, arise in employment also contributed to a marked reduction in backlogs, which fell at the second-sharpest rate on record.
Highlighting further, the report said “Price pressures intensified with overall input price inflation quickening to the fastest in the series. Material scarcity in particular, and higher staff costs, were linked to the uptick. Subsequently, firms raised selling prices to protect their profit margins.”
The report however stated that sentiment regarding the year ahead remained upbeat, with plans to expand operations and invest in marketing fuelling hopes.
It however stated that expectations were below the long-run series average suggesting uncertainty surrounding the economic impact of COVID-19 weighed on optimism.
