Economic activities drop for 13th straight month in July — CBN

Economic activities in Nigeria fell for the thirteenth month in July as high costs reduced new orders and employment declined, Central Bank’s Purchasing Managers’ Index showed

According to the report released Wednesday, the composite PMI stood at 49.7 points indicating a contraction in economic activities for the thirteenth consecutive month.

Economic activities, however, improved in July by 1.8 points when compared to the PMI for June 2024 which stood at 48.8 points.

“On the output level, suppliers’ delivery time and stock of inventory expanded while new orders and employment contracted at a slower rate compared to the levels recorded in the previous month,” the report stated.

The PMI index, which measures the performance of business activities, is based on the change in different aspects of respondents’ business activities.

An index above 50.0 points indicates an expansion in business activities while below 50.0 points indicates a contraction in business activities.

A sectoral breakdown showed that the Services Sector recorded a PMI of 50.3 points while the industrial sector recorded 48.3 points and the agricultural sector at 49.7 points registered a slower contraction when compared to the level recorded in the previous month.

The report further stated that 25 subsectors reported a decline in new orders contracted with pharmaceutical products reporting the highest levels of decline.

However, 9 subsectors reported increased levels of new orders but Cement and Forestry remained unchanged.

Reported that Nigerians are now paying three times more for antibiotics formerly produced by the British pharmaceutical giant, GlaxoSmithKline (GSK), one year after its exit.

Prices of GSK’s signature products, Augmentin 228mg and 475mg, have skyrocketed by 307 percent and 328 percent respectively between August 2023 when the company left Nigeria and August 2024, BusinessDay’s market findings show.

Eighteen sectors out of 25 sectors reported a contraction in employment levels with printing activities recording the highest decline in July while the Petroleum and Coal subsector had the highest employment levels.

“At 48.7 index points, the composite employment level indicated contraction in July 2024 for the seventh consecutive month. The index improved in July 2024 when compared to the 48.3 points recorded in the previous month,” the report said.

In the services sector, the motion pictures, cinema, sound recording, and music production subsector registered the highest expansion, bringing the sector’s PMI to 50.3 points.

Meanwhile, Stanbic IBTC’s PMI report for July, showed that the headline index declined to 49.2 points, down from 50.1 points in June and below the 50.0 points no-change mark for the first time in eight months. This is a slight 1.01 point difference from CBN’s PMI for July.

According to the report, input costs and selling prices rose rapidly, although there were some signs that efforts to secure sales resulted in a slower pace of output inflation.

The report stated that prices increased sharply at the start of the third quarter as companies passed higher input costs through to their customers.

“The renewed decline in output was accompanied by a reduction in business confidence, with firms at their least optimistic since the survey began,” the report said.