Nigeria’s Private Sector records output expansion in the Month of May 2024 

Nigeria’s Private Sector records output expansion in the Month of May 2024 as the Purchasing Managers’ Index (PMI) for Stanbic IBTC Bank Nigeria reached 52.1 in May 2024, marking a slight increase from the previous month’s reading of 51.1. This index serves as a measure of the level of activity within the private sector of the country.

A value above 50 indicates growth in private sector activity compared to the previous month, while a value below 50 signifies a contraction, and 50 represents no change. With a PMI of 52.1, this is the highest recorded since January 2024, indicating that the Nigerian private sector experienced accelerated growth, with both output and new orders seeing significant increases.

However, the rise in prices limited demand, and companies faced challenges due to the high cost of input materials, which hindered their project completion efforts. Despite these obstacles, all four sectors under observation, including manufacturing, services, wholesale and retail, and agriculture, recorded growth, with the manufacturing sector leading the way.

Elements of Nigeria’s Private Sector records output expansion

The modest increase in Nigeria’s Private Sector economic activities during May suggests a notable improvement in the business climate for Nigerians. However, in June, the labor union’s industrial actions, driven by demands for an increase in the minimum wage, posed a threat to business activities. To prevent disruptions in economic activities caused by power blackouts resulting from the shutdown of the national grid and blockage of major roads, it is crucial for the government to reach a timely agreement with the labor union.

Additionally, addressing persistent inflation and exchange rate pressures, and providing strategic support to key sectors, are necessary steps for the government to strengthen the macroeconomic conditions and sustain the growth in private sector activities.