Stanbic IBTC PMI® Reveals Boost in Nigerian Private Sector Activity Amid Easing Inflation
February data from the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index® (PMI®) indicates a significant uptick in growth within the Nigerian private sector, marking the fastest output expansion in just over a year. The PMI rose to 53.7 in February, up from 52.0 in January, signaling a notable improvement in business conditions.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, noted that this marks the third consecutive month of improvement, with the latest PMI reading being the highest since January 2024. Contributing factors include a relatively stable exchange rate and a moderation in fuel prices, which have eased inflationary pressures and bolstered consumer demand. As a result, new orders increased for the fourth straight month, reflecting a growing willingness among customers to engage in new projects.
Output also surged, with the output index climbing to 56.9 points from 53.7 in January. Although input price inflation decreased to its lowest level since April 2024, nearly 39% of respondents still reported raising their output prices, while less than 1% reported cuts.
The Nigerian economy’s real GDP growth improved to 3.84% year-on-year in Q4:24, up from 3.46% in Q3:24, marking the highest growth rate since Q4:21. The services sector continued to dominate GDP growth with a contribution of 79%, followed by agriculture at 11.9% and industry at 9%.
Looking ahead, the non-oil sector is expected to gain momentum in 2025, supported by stable foreign exchange conditions and improved liquidity. Projections indicate a 3.4% growth rate for the non-oil sector, contributing to an overall expected GDP growth of 3.5% in real terms for the year.
While the private sector shows positive signs with increased output and new orders, hiring remains cautious due to rising costs, leading to only a marginal increase in employment. Nevertheless, companies are optimistic about future growth, with plans for business expansion and increased export operations on the horizon.