By Nkiruka Nnorom A map of Nigeria Manufacturing and production firms have witnessed a sharp rise in purchasing costs due to difficultie...
By Nkiruka Nnorom
Manufacturing and production firms have witnessed a sharp rise in purchasing costs due to difficulties in securing materials, leading to higher output prices and rise in inflation.
This is contained in the Stanbic IBTC Bank’s Nigeria PMI Rrort for April, 2020.
According to the report, new orders, output and employment witnessed sharp falls as prices rise amid supply chain disruption, especially in the private sector.
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The Nigeria PMI report, published by Stanbic IBTC Bank Plc, reflects economic indicators gotten from regular surveys of private sector companies and it is targeted at providing information about current business conditions to various stakeholders. Readings above 50.0 indicate an improvement in business conditions while readings below 50.0 show a deterioration.
“The advent of coronavirus pandemic (COVID-19) and the lockdown imposed to curtail its spread have led to a severe deterioration in business conditions across the Nigerian private sector during April. Both output and new orders decreased at rates unprecedented in more than six years,” the report revealed.
The report also showed that firms scaled back employment as most companies kept their staffing levels unchanged at the start of the second quarter.
It noted that the introduction of the lockdown prevented many firms from completing outstanding orders, thereby making backlogs of work to increase for the first time in three months. Specifically, this report is a weighted average of the following five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%), the report stated.
Despite many companies experiencing a drop in confidence due to a severe decline in business activities across the country when compared to the index of the previous six months, there is optimism that businesses will begin to bounce back steadily once the pandemic eases.
The post Higher raw materials costs responsible for increased prices of goods — Report appeared first on Vanguard News.
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