Demand Is Holding, Costs Are Moving Faster
October's survey describes an economy still expanding at a healthy pace but with the impulse shifting. New order growth was only slightly slower than September, when it was the fastest since early 2022, and firms kept on top of workloads comfortably enough to run down backlogs for a third straight month, at the fastest rate since January. Output rose across all four monitored sectors.
The pressure sits in prices rather than volumes. Fuel was the main driver of the sharpest rise in purchase costs in four months, and companies passed a larger share of it on: selling price inflation matched the four month high, though it stayed below the spike recorded earlier in the year. Staff costs rose modestly as firms paid more to help employees absorb higher living costs.
What This Means for Listed Companies
For the NGX, the read across is a margin question rather than a growth question. Consumer and industrial companies reporting nine month results over the past two weeks have mostly shown revenue growth well ahead of volume growth, and the PMI suggests price led growth continued into October. Companies with pricing power, particularly in manufacturing, where selling prices rose fastest, can protect margins. Those selling into wholesale, retail and services face a weaker backdrop: those sectors cut staff in October, a sign that demand there is thinner and cost pass through harder.
