Nigeria’s private sector posted its strongest performance in more than a year and a half, as the Stanbic IBTC Bank Purchasing Managers’ Index (PMI) rose to 54.2 in August, up slightly from 54.0 in July.
Gatekeepers News reports that the figure represents the fastest expansion in new business since January 2023 and a four-month high in output.
The PMI has now stayed above the 50.0 mark—which separates growth from contraction—for nine consecutive months, underscoring sustained improvement in business conditions.
According to the survey, the August upturn was driven by a sharper rise in output and new orders, supported by stronger customer demand and increased client willingness to commit to new projects. Growth was recorded across services, construction, and agriculture, while manufacturing lagged behind.
Firms responded to higher demand by raising employment for the third straight month, though job creation slowed compared with July. Purchasing activity also eased slightly, but companies continued stockpiling inputs in anticipation of future growth. For the first time in five months, backlogs were cleared, signaling improved efficiency.
Despite the gains, business sentiment softened for the second month in a row. Companies said they remained cautiously optimistic, with expansion plans—such as new branches and stepped-up marketing—expected to drive future growth.
The report also highlighted a notable easing of inflationary pressures. Input costs rose at their slowest pace since March 2023, while output price inflation declined for the fourth consecutive month, reaching its lowest level since April 2020. Staff cost inflation also slowed to a three-month low, with wage increases mainly tied to faster project delivery and cost-of-living adjustments.
Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, said the trend bodes well for Nigeria’s inflation outlook.
“The continued moderation of input and output prices suggests that inflation is likely to remain soft in the near term. This may incentivize the Monetary Policy Committee (MPC) of the Central Bank of Nigeria to adopt a more accommodative stance by September,” Oni noted.
Stanbic IBTC forecasts headline inflation to moderate further in August to between 21.45% and 21.63% year-on-year, with a sharper drop expected by November to between 17.19% and 17.92%. The bank projects up to 150 basis points in cumulative rate cuts in 2025.
