Nigeria’s private sector hits 29-month growth high as PMI jumps...

Nigeria’s private sector entered the final stretch of the year with its strongest expansion in 29 months, as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) climbed to 54.3 points in August 2026, signalling a sharper rebound in business activity, new orders and output.

The August reading, compiled by S&P Global and endorsed and adopted by the National Bureau of Statistics (NBS), rose from 52.5 points in July, extending the private sector’s expansion to a seventh consecutive month.

The 1.8-point increase represents the joint-strongest monthly improvement in business conditions in more than two and a half years, matching the level recorded in March 2025.

A PMI reading above 50 indicates expansion while a reading below 50 signals contraction.

The acceleration was led by new orders, which increased at their fastest pace since early 2024 as companies reported stronger customer demand and new product launches.

Businesses responded by raising output at a significantly faster pace than in July, with all four broad sectors covered by the survey recording growth. Agriculture and manufacturing posted particularly strong increases.

Output has now expanded for 21 consecutive months, providing a strong signal that the recovery in private-sector activity is becoming more established.

Improving demand also encouraged companies to increase purchasing activity at the fastest rate since November 2025, while stock accumulation reached a nine-month high.

Employment increased for the 15th consecutive month, although hiring remained modest compared with the pace of growth in orders and output. Wholesale and retail firms reduced headcount, while employment increased in the other sectors.

Despite relatively restrained hiring, firms succeeded in reducing backlogs of work for the first time in seven months, suggesting stronger operating capacity as demand improves.

Head of Equity Research, West Africa, at Stanbic IBTC Bank, Muyiwa Oni, said the latest figures showed that Nigerian private-sector activity remained firmly in expansion territory.

“Private sector activity in Nigeria was in an expansionary territory for the seventh consecutive month, rising to 54.3 points in August from 52.5 points recorded in July,” Oni said.

He added that businesses remained optimistic about the outlook, with plans to expand into new locations, increase exports, hire additional workers and attract more customers.

The expansion, however, came with renewed cost pressures.

Purchase-cost inflation increased during August as businesses faced higher fuel, transportation and raw-material costs, although the rate remained below the 2026 average.

Staff-cost inflation, in contrast, slowed to a nine-month low.

Companies passed part of their higher operating costs to consumers, pushing selling-price inflation higher. Agriculture recorded the fastest increase in charges among the sectors surveyed.

Oni also pointed to continuing food-price pressure, noting that food inflation rose to 20.31 per cent in July, from 17.52 per cent in June, even as headline inflation moderated to 15.43 per cent from 15.91 per cent.

Stanbic IBTC said the strength of the PMI readings in the third quarter points to stronger economic activity and could support 4.1 per cent GDP growth in 2026.

The bank forecasts non-oil sector growth of 4.11 per cent, up from 3.71 per cent in 2025, while oil-sector growth is expected to slow to 3.45 per cent from 8.50 per cent.

Manufacturing is expected to receive one of the strongest boosts, partly because of a low statistical base in 2025, while ICT, trade, real estate, finance and insurance are expected to remain important drivers of services growth.

The private sector outlook also remains broadly positive, although business confidence for the next 12 months slipped to a three-month low.

Companies nevertheless cited plans to expand geographically, increase exports and employment, and win more customers as reasons for expecting higher future output.

The PMI findings come against a backdrop of stronger official economic growth. Nigeria’s real GDP expanded 4.43 per cent year-on-year in Q2 2026, up from 4.23 per cent a year earlier, according to the NBS.

Agriculture expanded 4.39 per cent, services grew 4.60 per cent, while industry slowed to 3.96 per cent from 7.46 per cent in Q2 2025.

Taken together, the latest indicators point to a private sector gaining momentum as demand strengthens and businesses raise production.

The bigger economic test, however, will be whether the improvement in activity can outpace rising fuel, logistics and raw-material costs sufficiently to generate stronger investment, employment and household purchasing power.

For now, the 54.3 PMI reading provides one of the clearest signs yet that Nigeria’s private sector is entering a stronger phase of recovery, even as businesses continue to operate under significant cost pressures.