The Nigerian private sector remained in a deep downturn during May, with rates of decline in output and new orders only slightly softer than the unprecedented falls recorded in April.
The impact of the coronavirus disease and lockdown introduced to prevent its spread continued to be felt, with business confidence falling again.
That said, employment decreased only marginally as the vast majority of companies kept workforce numbers unchanged.
Meanwhile, the rate of purchase cost inflation surged to a new record high, with firms likewise raising their own selling prices at a pace unseen since the survey began in January 2014.
The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI®).
Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The headline PMI posted 40.7 in May, up only slightly from 37.1 in April and signalling a further substantial deterioration in business conditions which was the second-steepest since the survey began.
Similar trends were recorded with regards to output and new orders, with rates of contraction easing slightly due to a loosening of lockdown restrictions but remaining considerable.
Falling demand and a lack of customers were widely mentioned.
Delays to orders received before the lockdown began and restrictions on operations meant that backlogs of work increased for the second month running.
Moreover, the rate of accumulation in outstanding business was the sharpest since November 2018.
Employment fell only marginally in May as the vast majority of respondents (98%) kept their staffing levels unchanged.
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 all mentioned as leading to higher purchase prices.
In contrast, staff costs decreased for the second month running as wages were lowered in line with reduced working hours.
The steep increase in purchase costs was often passed on to customers in the form of higher selling prices.
As a result, May saw the rate of output price inflation accelerate to a new record high.
Reduced activity requirements led to a second successive decline in input buying, while inventory holdings also fell.
Meanwhile, suppliers' delivery times shortened slightly.
Business confidence dropped for the third month running and was the lowest since December 2017. ■