Yuletide demands boost Nigeria’s manufacturing sector’s performance in December 2024

• Nigeria’s manufacturing sector’s performance increased to 52.70 points in December 2024
• The uptick was driven by high demands during the yuletide season
• The rise is expected to lead to increased employment and output growth

Nigeria’s manufacturing sector ended 2024 on a high note, with the Purchasing Managers’ Index (PMI) rising to 52.70 points in December, driven by a surge in demand during the yuletide season.

According to the Stanbic IBTC Bank Nigeria PMI report for December 2024, the rise is a pointer to a moderate expansion in manufacturing activities, pointing to a promising outlook for the sector in the new year.

The report stated that the country’s PMI increased for the second consecutive month to 52.7 from 49.6 in November 2024.

It should be noted that a PMI reading above 50 indicates an improvement in private sector activities, while a reading below 50 shows a decline.

Nigeria’s PMI was below the 50-point threshold between July and November 2024, but the December reading above 50 suggests a turnaround.

Yuletide demand responsible for the uptick

The rise in Nigeria’s PMI reading for December 2024 is largely driven by the surge in demand during the festive season.

The season led to growth in new orders and sustained employment and output growth, which align with the observations from November 2024.

Uptick to positively impact employment and output

The PMI rise is expected to positively impact the manufacturing sector, which contributed 8.2 per cent to Nigeria’s Gross Domestic Product (GDP) in the third quarter of 2024, and boost Nigeria’s economy.

Analysts specifically say the improved PMI reading will drive employment and output in the manufacturing sector.

They maintain that as demand continues to grow, manufacturers are likely to increase production and hire more workers, which will help to reduce unemployment and stimulate economic growth.

Inflation: Nigerian businesses experienced worsening conditions in October –Report

Meanwhile, TheRadar earlier reported that the Stanbic IBTC Purchasing Managers’ Index (PMI) for October revealed that Nigerian businesses experienced worsening conditions in the month due to inflationary pressures.

The report noted that cost pressures were triggered, resulting in the sharpest decline in business activities in October for the first time in 19 months to 46.9 from 49.8 in September.