Christmas Festivities Drive Business Activities Up, Highest in Six Months
- Christmas festivities in December 2024 pushed economic activities up to the highest in six months
- The Stanbic IBTC Bank Nigeria PMI Report, compiled by S&P Global, also revealed a significant growth in the private sector, majorly driven by four sectors
- Despite the positive PMI reading and growth in other Key metrics, Business Confidence remained low in the sectors surveyed
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Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience and a deep understanding of Nigeria's corporate sector and emerging trends in the fintech space.
December 2024 recorded the highest business activities in Nigeria for the second half of the year, thanks to the Christmas season and its festivities.
This is seen in the Stanbic IBTC Bank Nigeria Purchasing Manager Index (PMI) released on Thursday.
The Headline Purchasing Manager Index (PMI), which had stayed below 50.0 points throughout the second half of 2024, moved to 52.7 points in December 2024, up from the 49.6 points seen in November 2024.
A PMI reading above 50.0 points indicates improvement in the sector compared to the previous month, while readings below 50.0 points indicate regression.
Thus, December showed the most impressive growth in the private sector since January 2024.
Source: Getty Images
New orders, employment & purchases
The PUNCH reports that new orders, outputs, purchases, and employment also increased to meet the demand.
This report, conducted by S&P Global, surveys purchasing managers from 400 private companies. It covered sectors in Nigeria such as manufacturing, mining, construction, retail, wholesale, services and agriculture and was conducted by S&P Global.
Mr. Muyiwa Oni, Stanbic IBTC Bank Head of Equity Research West Africa, said;
“This improved private sector activity reflects renewed expansions in output, purchasing, and employment levels. New orders also increased for the second consecutive month, with the latest increase being the highest since May 2024, reflecting an improvement in consumer demand. Nonetheless, while some firms increased employment in response to the higher new orders, others reported having to let staff go due to difficulties paying wages.”
An increase in new orders led to increased employment and purchases and an expansion of business activities during the month.
More customers, higher prices
Mr Oni also noted that the increased output was linked to an increase in customers, with the highest growth recorded against four broad sectors.
Input and output prices went higher in December 2024 across the sectors, although much of the growth is attributed to economic activities arising from the Yuletide, as well as increased crude oil production.
He said;
“On balance, we estimate the economy to grow by 3.24 per cent year-on-year in real terms in Q4:24 and adjust our 2024 growth estimate upward to 3.2 per cent (previously: 3.1 per cent). Over the medium term, some firms were optimistic about improvements in access to funding, helping them to invest in business expansions, while others were hopeful of an improvement in economic conditions in 2025 and a softening of inflationary pressures.”
Notwithstanding the highs recorded in the report, business confidence was the third lowest since the survey started in 2014. The continued naira depreciation and higher fuel and transportation costs still pushed purchase prices higher.
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Source: Legit.ng
