By Elizabeth Adegbesan
A Purchasing Managers Index report has shown that employment rate and businesses’ confidence in the country’s economy dropped marginally in May, 2020.
This corresponds with the recent Central Bank of Nigeria’s (CBN) PMI report which showed that employment fell at a faster rate by 26.8 index point to 32.0 index point in May from 58.8 index points in February 2020.
The Nigeria PMI Survey Report, by Stanbic IBTC Holdings PLC, is a collection of economic indicators obtained from monthly surveys of Nigeria private sector companies. The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail and services.
The indices vary between 0 and 100, with a reading above 50 indicating an improvement in business conditions compared to the previous month, while reading below 50 indicates a decline.
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The report stated:”Despite predictions of a huge rise in unemployment due to the negative impact of the Coronavirus pandemic (COVID-19) on businesses in the country, the Nigeria Purchasing Managers’ Index (PMI) report has revealed that employment in Nigeria decreased marginally as about 98 percent of companies kept their workforce numbers.
“The report also showed that new orders, output, employment level, suppliers’ delivery, and stock purchases rose to 40.7 index points in May 2020, a 3.6 increase from 37.1 index points recorded in April 2020.”
According to the report, the private sector remained in a deep downturn in May, with rates of decline in output and new orders only slightly softer than the unprecedented falls recorded in April 2020.
It stated:”Furthermore, the rate of purchase cost inflation hit a record high for the second month running, with the scarcity of materials, currency weakness and higher costs relating to logistics leading to higher purchase prices.
“Due to the lockdown and restrictions on operations, firms experienced delays to orders received which resulted in an increase in backlogs of work for the second month running. While suppliers’ delivery times shortened slightly, reduced activity requirements led to a second successive decline in input buying while inventory holdings fell. “Although business confidence dropped to a 29 month low in May, the rate of contraction is easing slightly as a result of relaxing the lockdown restrictions.”