Stanbic IBTC Bank has released its monthly Purchasing Managers Index, PMI report which indicated that the private sector in December recorded the expansion in six months.

The report also showed that the private sector recorded increase in new orders for the second consecutive month in December.

PMI readings above 50 index point represents signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

The report stated: “The headline PMI moved back above the 50.0 no-change mark for the first time in six months during December. At 52.7, the index was up from 49.6 in November and signaled a solid improvement in the health of the private sector that was the most pronounced since January 2024.That said, rates of inflation remained elevated.

“New orders increased for the fourth time in the past five months, with the pace of expansion quickening to the fastest since May. Respondents noted improving client demand and rising customer numbers.

“Sustained growth of new orders led to a renewed expansion of business activity in December, thereby ending a five- month sequence of contraction. All four broad sectors signaled rising output at the end of 2024”.

Commenting on the PMI, Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank said: “In line with the increase in economic activity usually associated with festive season in Nigeria, the private sector activity moved above the 50-points psychological threshold for the first time in six months, settling higher at 52.7 in December from 49.6 in November-its most pronounced improvement since January 2024.

“This improved private sector activity reflects renewed expansions in output, purchasing, and employment level. New orders also increased for the second consecutive month, with the latest increase being the highest since May 2024, reflecting improvement in consumer demand. Nonetheless, while some firms increased employment in response to the higher new orders, others reported having to let staff go due to difficulties paying wages.”