Nigeria’s economic recovery broadens as CBN Composite PMI

Nigeria’s economic activity strengthened for a third consecutive month in August 2026, with the Central Bank of Nigeria’s (CBN) Composite Purchasing Managers’ Index (PMI) rising to 52.7 points from 51.1 in July, as agriculture and services maintained expansion and industry returned to growth.

The latest CBN reading points to a broadening, though still modest, recovery in private-sector economic activity, with output, new orders and employment all remaining above the 50-point threshold that separates expansion from contraction.

The August performance is particularly significant because it suggests that the improvement in the economy is no longer concentrated in one sector. While agriculture remains the strongest and most established source of momentum, services continued their recovery and industry finally moved back into expansion territory after months of contraction.

Industry PMI rose to 50.6 points in August, ending a run of contractions that had persisted since April. The recovery, however, remains fragile, with only five of 16 industrial subsectors recording expansion while 11 remained in contraction.

Oil refining recorded the strongest industrial expansion, while motor vehicles and assembly posted the steepest decline, showing the uneven nature of the industrial recovery.

The Services PMI also strengthened, climbing to 53.3 points, its second consecutive month in expansion after three months of contraction.

Nine of the 11 services subsectors expanded, led by administrative and support services, while professional, scientific and technical services recorded the sharpest contraction.

Agriculture remained the economy’s most consistent source of momentum. Its PMI increased to 53.4 points, extending its expansion streak to 25 consecutive months.

All five agricultural subsectors surveyed recorded growth, with forestry recording the strongest expansion. General farming activities posted 56.5 points, while new orders, employment and inventories stood at 53.2, 52.7 and 51.2 points respectively.

Across the economy, the Composite Output Index reached 53.9 points, while New Orders stood at 51.8 and Employment at 52.4, indicating that businesses continued to increase production, secure new demand and expand staffing.

The Stock of Raw Materials Index also remained above the neutral line at 51.6 points, while the Suppliers’ Delivery Time Index rose to 53.3 points, suggesting faster supplier responses and some improvement in supply-chain efficiency.

The numbers point to a recovery that is gradually becoming more broad-based, but the composition also shows why policymakers cannot afford to declare victory yet.

Agriculture has now maintained expansion for more than two years, providing a dependable base for economic activity, while services have only recently returned to sustained growth.

Industry’s return to expansion is encouraging, but the fact that 11 of 16 industrial subsectors remained in contraction shows that manufacturing and other productive activities are still facing considerable constraints.

Price pressures also remain part of the picture.

The Composite Input Price Index declined by 0.2 points during August, but the Output Price Index increased by 1.0 point, with selling prices in agriculture and services rising faster than their respective input prices.

That development suggests that businesses continue to possess some pricing power even as cost pressures remain embedded in the economy.

The CBN also reported that 19 subsectors recorded expansion during the month, with oil refining delivering the strongest growth.

The latest central-bank survey broadly reinforces the more upbeat picture from the Stanbic IBTC PMI, which showed Nigeria’s private sector recording its greatest improvement in business conditions in 29 months, with its August reading rising to 54.3 from 52.5.

Stanbic IBTC has projected that the strength of third-quarter activity could support 4.1 per cent GDP growth in 2026, with the non-oil sector expected to expand by 4.11 per cent.

Those indicators are also consistent with the latest official GDP data. Nigeria’s real economy grew by 4.43 per cent in Q2 2026, up from 4.23 per cent a year earlier, with agriculture and services leading the expansion.

The central challenge is now to translate the improving survey indicators into stronger actual production, investment and employment.

The August PMI provides evidence that economic activity is gaining traction, but the uneven industrial performance and continuing price pressures show that the recovery remains incomplete.

For Nigeria, the significance of the 52.7 Composite PMI is therefore not simply that it is above 50. It is that agriculture has sustained a 25-month expansion, services are rebuilding momentum,m and industry has finally returned to positive territory.