Businesses in Nigeria faced the highest increase in input cost in a decade due to the weakness in the exchange rate for February.
This is according to the Stanbic IBTC Purchasing Managers Index (PMI) for February 2024.
According to the report, Nigeria’s business PMI dropped significantly from 54.5 recorded in January to 51.0 for the month with business conditions recording the weakest recovery since December 2023.
The report stated,
Furthermore, the Stanbic PMI for the month noted that business owners transferred the rising input costs to customers resulting in output inflation. Another effect of the record increase in input cost was the reduction in new orders on the part of businesses.
However, new businesses increased in February as well as business rise in business activities with agriculture leading the way while manufacturing and FMCG saw a slump in business activities.
For the first time in 10 months, businesses recorded a drop in staffing levels, a reduction in purchasing activities and business confidence dropping to a record low for the month.
Muyiwa Oni, head of Equity Research at Stanbic IBTC bank stated that the increase in input cost occasioned by significant currency depreciation and increase in transport cost may negatively affect growth in the first quarter of the year- projecting economic growth for 2024 at 2.9%.
He stated,
