Inflation: Economic activities in Nigeria decline for 13th consecutive month

The volume of economic activities in Nigeria declined for the thirteenth month in July as inflation weakened purchasing power.

This is according to the latest Central Bank’s Purchasing Managers’ Index, PMI, released on Wednesday.

The data showed that the country’s composite PMI stood at 49.7 points, indicating a contraction in economic activities for the thirteenth consecutive month.

Economic activities, however, improved in July by 1.8 points when compared to the PMI for June 2024, which stood at 48.8 points.

According to the PMI, which measures the performance of business activities, an index above 50.0 points indicates an expansion in business activities, while below 50.0 points indicates a contraction in business activities.

“On the output level, suppliers’ delivery time and stock of inventory expanded while new orders and employment contracted at a slower rate compared to the levels recorded in the previous month,” the report stated.

A sectoral analysis of the report shows that the Services Sector recorded a PMI of 50.3 points while the industrial sector recorded 48.3 points. The agricultural sector at 49.7 points registered a slower contraction when compared to the level recorded in the previous month.

The report further stated that 25 subsectors reported a decline in new orders contracted, with pharmaceutical products reporting the highest levels of decline.

However, nine subsectors reported increased levels of new orders in, but Cement and Forestry remained unchanged.

“At 48.7 index points, the composite employment level indicated contraction in July 2024 for the seventh consecutive month. The index improved in July 2024 when compared to the 48.3 points recorded in the previous month,” the report added.

Recall that the prices of pharmaceutical products in Nigeria increased astronomically after the exit of British firm, GlaxoSmithKline GSK.

Consequently, the prices of antibiotics rose by almost three times in Nigeria. For instance, Augmentin 228mg and 475mg, have skyrocketed by 307 percent and 328 percent, respectively, between August 2023 when the company left Nigeria and August 2024.

The CBN had announced plans to reintroduce key economic reports, including the PMI report.