By Dike Onwuamaeze
The productivity of the Nigerian private sector recorded sustained growth in March as business conditions improved in the first quarter of 2021 than it did in five months.
This was the verdict of the Stanbic IBTC Bank’s Nigeria PMI (purchasing manager index) report for March 2021, which stated that the sub-sector PMI readings, “indicated that manufacturing posted the fastest rise in output in March, followed by services and agriculture respectively while wholesale and retail recorded a decline in activity.”
It stated that rising output encouraged firms to increase their purchases and employment in March, which allowed firms to complete outstanding work.
The report stated that, “output and new order growth strengthened for the second successive month which led to a solid rise in purchases. Employment meanwhile rose marginally, and firms continued to reduce their backlogs at near-record rates. Looking forward, firms remain hopeful that their output levels will increase over the next 12 months.”
The report also stated that input price inflation remained robust with material shortages driving a sharp increase in purchase costs. In turn, firms raised their selling prices at a faster pace.
It added: “At 52.9 in March, up marginally from 52.0 in February, the headline seasonally adjusted PMI signaled expansion, and one which extended the current sequence of growth to nine months.
“Higher customer numbers led to a rise in new orders with the rate of growth the strongest since last October. This supported another expansion in output, and one which was solid overall.”
The PMI report further stated that sustained growth in new orders encouraged sharp accumulation in the stocks of purchases while supplier delivery times continued to shorten.
It stated that material shortages weighed slightly on vendor performance, adding that, “as a result of a shortage in the supply of raw materials, purchase prices rose at the joint second-sharpest rate in the series.
“Higher staffing costs also contributed to a robust rise in overall expenses. The passing on of cost burdens to clients led output prices to increase a sharp and accelerated rate.”