Stanbic IBTC Bank Nigeria PMI®: Sharp Rise in New Orders Continues in June
Positive demand conditions drove further growth in Nigeria’s private sector during June, supporting increased output and new orders at the halfway point of the year. As workloads rose and prospects for future expansion improved, companies took on additional staff, while also boosting purchasing activity and inventory levels. Input costs and output prices increased sharply once again, though at a slightly slower pace than immediately following the outbreak of conflict in the Middle East. The key indicator derived from the survey is the Stanbic IBTC Purchasing Managers’ Index™ (PMI®). Readings above 50.0 indicate an improvement in business conditions compared to the previous month, while those below 50.0 signal a decline.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, remarked: “Although the rate of growth slowed in June compared to May, Nigeria’s private sector witnessed an increase in output at the end of Q2:26 as higher demand and new product development supported an increase in sales volume for companies. This rising demand led to higher workload, thereby ensuring the private sector hired new staff across three of the four sectors monitored by the survey besides agriculture. Business confidence also rose to a 12-month high, with firms citing the ability to secure new stocks, business expansion plans, and advertising efforts as key factors supporting expectations of output growth over the next year. Input prices continued to rise but not to the levels seen during the onset of the United States/Israel–Iran conflict.”
This increase in input costs had a passthrough effect on output prices, driven by higher raw material and transportation costs. “The PMI reading during the quarter is consistent with a likely 3.94% year-on-year GDP growth rate in Q2:26, marginally higher than the 3.89% recorded in Q1:26. We maintain our 2026 growth forecast at 4.1%, anticipating the oil sector will grow by 3.45% year-on-year in 2026, down from 8.50% in 2025. The non-oil sector is expected to expand by 4.11%, compared to 3.71% last year. Risks to this outlook include nationwide insecurity potentially constraining food production, resurfacing exchange rate pressures, extreme weather conditions impacting crop yields, and rising fertiliser costs. Additionally, a volatile global environment could dampen sentiment and hinder capital flows.”
The headline PMI registered at 53.4 in June, a slight decrease from May’s reading of 54.1, but still comfortably above the 50.0 threshold indicating no change. This points to a solid monthly improvement in business conditions at the end of the second quarter. The private sector has now experienced five consecutive months of growth. Respondents frequently reported improving customer demand in June, which, alongside new product launches, contributed to a marked increase in sales volumes. As new orders grew and companies expanded their operations, output also increased, albeit at a softer rate than in May. Growth was observed across three of the four broad sectors covered by the survey, with manufacturing being the only sector to report a slowdown.
Optimism about future output also strengthened, reaching its highest level since June 2025. Factors such as advertising efforts, business expansion plans, and stockpiling contributed to this heightened confidence, according to survey respondents. Improving customer demand and positive outlooks for the year ahead encouraged firms to increase staffing levels, purchasing activity, and inventories in June. Employment has now risen for thirteen consecutive months, with the rate of job creation modest but the strongest since February.
Purchasing activity expanded at a similar pace to May, with stocks of inputs also rising solidly. Despite increased operational capacity, backlogs of work continued to grow due to customer payment delays and power supply issues. Supply-chain disruptions persisted as vendor lead times lengthened for the first time in a year, often attributed to poor road conditions. Higher fuel, raw material, and transportation costs led to a further sharp increase in purchase prices during June, although the rate of inflation eased to a four-month low. Staff costs rose at a faster pace as companies supported their workers amidst rising living expenses. The pass-through of higher input costs to customers resulted in a further marked increase in selling prices, with the inflation rate ticking up from May.