In August, the heartbeat of Nigeria’s private sector pulsed stronger than it has in almost two years. Fueled by rising customer demand and easing inflationary pressures, businesses recorded sharper growth in both output and new orders, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI).
At 54.2 points, up from 54.0 in July, the PMI signals the ninth consecutive month of expansion and the strongest improvement since April. For context, any reading above 50 points indicates growth in business activity.
For many Nigerian firms, August wasn’t just another month, it was a turning point. The report shows that new order growth soared to its highest level in 19 months, reflecting customers’ renewed willingness to invest in new projects.
This surge, in turn, pushed output to its own four-month high, keeping service and industrial firms particularly busy. Manufacturing, however, lagged behind.
“Business activity increased further in August and has remained above 50 points for the ninth consecutive month,” noted Muyiwa Oni, head of Equity Research, West Africa at Stanbic IBTC Bank. “The increase was driven by sharper increases in output and new orders. Notably, new orders quickened to a 19-month high amid reports of increasing customer demand.”
Why It Matters
- Jobs & Staffing: Firms responded to the higher demand by expanding staffing for the third month in a row. However, job creation slowed compared to July.
- Inflation Relief: Input costs rose at the slowest pace since March 2023, while output price inflation eased for the fourth straight month, now at its lowest since April 2020. This moderation hints at a possible shift in the Central Bank’s monetary policy towards a more accommodative stance in September.
- Future Outlook: While business confidence softened slightly, optimism remains alive. Companies cited branch expansions, marketing campaigns, and rising orders as reasons to believe growth will continue into 2026.
The Bigger Economic Picture
Nigeria’s economy is still charting a steady course. Real GDP grew by 3.13% y/y in Q1 2025, slightly slower than Q4 2024 but bolstered by the industrial sector’s rising contribution, a shift largely attributed to the operations of the Dangote Refinery. Services remain the backbone, while agriculture slowed.
With softer inflation, improved FX liquidity, and structural reforms, analysts project GDP growth of 3.5% in 2025, edging up from 3.4% in 2024.
Bottom Line
The August PMI results paint a picture of resilience and cautious optimism. Nigeria’s private sector is not only holding steady but showing signs of acceleration, particularly in demand and output.
If inflationary pressures continue to ease, businesses and consumers alike could breathe easier, and the economy may yet surprise on the upside in 2025.
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