Report: 46% of Firms Increased Prices in March

Dike Onwuamaeze

A report by the StanbicIBTC has revealed that 46 per cent of private enterprises in Nigeria increased the selling prices of their products and services in March while only 2.0 per cent lowered their prices during the period under review.

This was disclosed in the latest Purchasing Manager Index (PMI) that was released last week, which stated that many businesses sought to share the high cost of doing business in the country with their customers.

The PMI said: “Private sector firms in Nigeria sought to share higher cost burdens with their clients during the month (March). Almost half of surveyed respondents (46 per cent) raised their selling prices in March while just 2.0 per cent lowered them. Output price inflation has now been seen in each month since January 2016, with the latest uptick among the quickest in the survey’s history.”

The PMI report also stated that its March data revealed a marked and accelerated uptick in purchase costs that were incurred by private sector companies in Nigeria. It said: “In fact, the rate of inflation quickened for the second month running and was among the steepest in the series history.”

The report attributed the inflationary pressure in the economy to “higher fuel and raw material costs as well as unfavourable exchange rate movements,” adding that all the “four sub-sectors recorded marked upticks in purchase costs, led by manufacturers.” The sub-sectors are manufacturing, agriculture, services and trade.

It further stated that “overall input prices rose sharply in March, continuing the run of inflation which began at the start of the series in January 2014. The rate of inflation eased from February, but still was marked by historical standards and was the fourth steepest in the series history. Rising purchase and wage costs led to the uptick.”

The report also showed that firms increased their inventories amid efforts to protect themselves against future price hikes and shortages in March.

The PMI showed that the output of the Nigerian private sector rose for the sixteenth month in succession during March.

It stated that business conditions in Nigeria’s private sector continued to improve solidly at the end of the first quarter of 2022 as the headline figure recorded 54.1, but the rate of growth slowed from February’s 57.3. It, nonetheless, reported that growth still remained elevated by historical standards and firms continued stockpiling efforts in anticipation of greater demand over the coming months.

Readings of the headline figure derived from the PMI’s survey above 50.0 signaled an improvement in business conditions on the previous month, while readings below 50.0 showed deterioration.