Employment is down for the first time in seven months as Nigeria’s inflation rate hampered private sector growth in November, S&P said in a purchasing manager index. According to the report, rates of inflation in the Nigerian private sector remained elevated in November, further hampering business operations. The report said that there were some signs of improvement midway through the final quarter, however, as new orders returned to growth and the decline in output softened. It said that employment was down and companies continued to lower their purchasing amid steep price pressures, details from the PMI revealed.
The headline PMI posted below the 50.0 no-change mark for the fifth consecutive month in November to signal a further deterioration in business conditions in the private sector. At 49.6 the latest reading was up from 46.9 in October and pointed to only a marginal decline. “The less pronounced deterioration in business conditions in part reflected a renewed expansion in new orders, which rose slightly following a solid fall in October. Although there were some tentative signs of demand improving, companies reported that customers were often deterred by high prices. The inflationary environment and muted demand conditions meant that business activity continued to fall, the fifth month running in which that has been the case. The latest reduction was only marginal, however. Sector data pointed to increases in output in agriculture and manufacturing, but decreases in wholesale & retail and services. Purchase costs rose rapidly again in November amid currency weakness and higher prices for fuel and raw materials. Although slowing slightly for the second month running, the pace of inflation remained elevated.
Staff costs were also up as companies helped their workers with higher living and transportation costs. In response to increasing input costs, output prices also continued to rise at a substantial pace midway through the final quarter of the year. The muted demand environment and high prices for inputs led companies to reduce both their purchasing activity and stocks of inputs in November. Employment was also down, thereby ending a six-month sequence of job creation. The pace of reduction was only marginal, however, as the overall fall in staffing levels was limited to just services firms. Companies continued to lower their backlogs of work, while there was also a lack of pressure on capacity at suppliers. Quiet road conditions, prompt payments, and competition among vendors also helped result in a further shortening of suppliers’ delivery times. Business confidence continued to wane in November and hit a fresh record low. Some firms remained optimistic in the outlook for output, however, amid business expansion and investment plans.”
Employment down as inflation hampers private sector growth—PMI
