Stanbic IBTC Bank Nigeria PMI®: Business Activity Continues to Rise Despite Rising Fuel Costs
The Nigerian private sector maintained its growth momentum at the start of Q2 2026, supported by increasing customer demand and market activity. However, the ongoing impact of higher fuel costs—driven by the war in the Middle East—continued to constrain expansion in new orders and overall business activity.
The key indicator derived from the survey is the Stanbic IBTC Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions compared to the previous month, while figures below 50.0 indicate a decline. In April, the PMI increased to 52.4 from 51.9 in March, marking the third consecutive month above the no-change threshold and reflecting a solid improvement in Nigeria’s private sector health. The rate of growth was slightly higher than in the previous survey period.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented: “The health of Nigeria’s private sector improved in April – remaining above the 50-points growth threshold for the third consecutive month – as new orders increased in line with higher customer numbers and rising demand even as price pressures remain prevalent. Accordingly, the headline PMI increased to 52.4 points in April from 51.9 points seen in March. Despite the improvement in new orders, we understand that lingering inflationary pressures limited the pace of expansion. Notably, companies increased their selling prices in April to the highest level since December 2024 in response to rising fuel and raw material costs. Staff costs also increased modestly as some companies increased their staff pay so as to help them with increasing transportation fares. Business expectations also improved in April compared to March as businesses plan to expand their operations through the opening of new branches, stock building, and entry into new markets.”
Looking ahead, Oni highlighted the optimistic outlook:
“The improved start of the second quarter of the year by Nigerian businesses continues to support our view of improved growth expectations in 2026 relative to 2025. Hence, we still maintain our expectation that the Nigerian economy is likely to grow by 4.22% y/y in 2026, from 3.87% y/y in 2025. We estimate the non-oil sector’s growth at 4.24% y/y in 2026, from 3.71% y/y in 2025, likely driven primarily by services, which we see growing by 5.64% y/y in 2026 (vs 2025: 4.14% y/y). The government’s continuous investment attraction across oil & gas, solid minerals, electricity, agriculture and general manufacturing should continue to support sentiment on production activity. However, the oil sector’s growth is likely to moderate to 3.01% y/y (vs 2025: 8.50%), as we now expect crude oil production (including condensates) to average 1.70m bpd, from 1.64m bpd in 2025.”
Demand and Price Pressures:
The survey indicated that demand conditions improved, with new orders rising again, though at a softer pace amid inflationary pressures. Business activity increased at a marginally faster rate than in March, but rising input prices—primarily driven by increased fuel costs—limited growth acceleration. Prices for purchase inputs rose rapidly, with the inflation rate remaining near a 15-month high. Companies also reported modest increases in staff costs, often to offset higher transportation expenses, resulting in a sharp rise in output prices—the fastest since December 2024.
Employment and Supply Chain Dynamics:
In April, companies added staff in response to increased workloads, although job creation was the softest in three months. Some firms cited staff shortages and delays in customer payments and raw materials as factors affecting operations. Outstanding business increased for the third consecutive month, reflecting ongoing supply chain and demand pressures.
Purchasing activity continued to rise for the seventeenth straight month, with stock levels increasing at the fastest rate in five months. Companies focused on timely payments to secure raw material deliveries, leading to a slight elongation of supplier lead times—the least in 2026 so far.
Business Outlook:
Business sentiment improved in April, with many firms expressing plans for expansion. Approximately half of the respondents expect their output to increase over the next 12 months, signaling cautious optimism amid ongoing inflation and supply chain challenges.