By Business AM
Nigeria’s industrial and agriculture sectors recorded the fastest input cost growth in January 2023, driven by a surge in energy and raw material costs that were exacerbated by the weakness of the naira in the foreign exchange market, according to the Stanbic IBTC Plc Purchase Manager Index (PMI) report.
The PMI report, which measures the performance of the private sector from a survey of 400 companies from agriculture, manufacturing, services, construction and retail, said the month of January witnessed an accelerated pace of cost inflation above the series average, led by the agriculture and manufacturing sectors.
“With input costs continuing to rise sharply, firms again increased their selling prices accordingly. As a result, January saw a further rapid pace of charge inflation that was well above the series average. The agriculture and manufacturing sectors posted the fastest increases in output prices,” the report read.
According to the report, even though input cost inflation decelerated for the second consecutive month to its softest level in a year in January 2023, input prices continued to rise sharply and at a greater level than at any point prior to May 2021. Moreso, sector data showed that cost pressures were most pronounced at manufacturers.
The January data pointed to a further marked increase in purchase prices in the Nigerian private sector, despite the rate of inflation easing to a three-month low. It also observed that higher costs for fuel and raw materials were widely reported, with a number of respondents indicating that currency weakness had exacerbated inflationary pressures.
The report also showed that the headline PMI dropped to 53.5 in January 2023 from 54.6 in December 2022 even though employment increased during the month under review at its fastest rate since June 2018.
Meanwhile, it noted that purchasing activity continued to rise solidly. On the price front, rates of inflation of input costs and output prices softened in January, but remained elevated.
