The private sector recorded the first business expansion in three months in December driven by increases in both output and new order coupled with recovery in demand, according to the Stanbic IBTC Bank Purchasing Managers Index, PMI.
The report stated: “This was despite continued intense inflationary pressure, with purchase costs and selling prices each rising at sharper rates than in November. Meanwhile, business confidence dropped to the joint-lowest in the decade-long survey so far.”
According to the report: “ The headline figure derived from the survey is the PMI. Readings above 50.0 signal an improvement or expansion in business conditions on the previous month, while readings below 50.0 show a deterioration or contraction.
The headline PMI moved back above the 50.0 no-change mark for the first time in three months at the end of 2023, posting 52.7 in December from 48.0 in November. The reading signalled a solid improvement in the health of the private sector, and one that was the most marked since June.
Demand conditions showed signs of recovery, leading to a marked increase in new orders following two months of contraction.
Similarly, business activity also returned to growth and was up solidly over the month. Sector data showed that wholesale & retail activity continued to fall, however.
The improvements seen in December were recorded in spite of a continuation of the severe price pressures seen in recent months. While overall input price inflation softened slightly, it remained among the sharpest on record.
The slowdown in overall input price inflation reflected a softer, but still solid increase in staff costs.
Meanwhile, the rate of purchase price inflation quickened for the third successive month and was the sharpest for two years. Panellists again linked inflation to exchange rate weakness and higher fuel costs, while there were also reports of higher prices for animal feed.
