The Stanbic IBTC Purchasing Power Index has dropped to 53.7 per cent in January 2022 from 56.4 in December 2021.

The drop, which reflected a four-month low, was attributed to the cost pressures that remained sharp in January, but purchase price inflation eased notably from December’s previous peak.

The survey report from Stanbic IBTC shows that despite the dip there was an improvement in business conditions.

The headline figure derived from the survey is the Purchasing Managers’ Index Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The survey revealed that expansions have now been seen in each of the last 19 months, with the latest uptick the softest since September.

According to the report: “Central to the moderation was a notable slowdown in new order growth.

“Total new business rose at the softest pace in 18 months with panel comments mentioning that cash shortages and high prices weighed on new order growth.

“The opening month of 2022 revealed a solid expansion in Nigeria’s private sector. Output continued to rise at a robust pace thanks to larger workforces as well as supportive domestic and international demand conditions. However, cash shortages weighed on new orders, which rose at the softest rate for a year-and-a-half. Nevertheless, firms remained committed to raising output and stockpiled inputs accordingly.

Further analysis from the report stated: “With new order growth easing in January, firms raised their output levels at a softer pace. The rate of growth was still robust, however, and above the long-run series average. Sub-sector data revealed expansions across the board, although agriculture recorded by far the strongest increase. Manufacturing, wholesale & retail and services followed, respectively.