•Output hits 15-month high
By Chinwendu Obienyi
Nigeria’s private sector sustained its growth momentum into the second quarter of 2025, with the latest Stanbic IBTC Bank Purchasing Managers’ Index (PMI), indicating another solid improvement in business conditions.
The headline PMI reading stood at 54.2 in April, virtually unchanged from 54.3 in March, and comfortably above the 50.0 no-change threshold for the fifth straight month.
The strong performance was underpinned by rising customer demand, which fueled sharp growth in output, new orders, and purchasing activity, alongside steady job creation across the economy.
According to the PMI report, business output rose at the fastest rate since January 2024, led by the services sector.
Furthermore, all four broad industries surveyed—agriculture, manufacturing, services, and wholesale and retail—recorded expansions, with the sharpest gains seen in services, reflecting increased consumer and business activity.
This latest improvement in business activity was primarily due to improved customer demand amid softening inflationary pressures, helping to support higher new orders,” said Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank.
In response to greater workloads, Nigerian firms expanded staffing levels for the fifth consecutive month. Although the pace of hiring was modest, it reached an eight-month high. Firms also ramped up purchasing activity to meet rising demand, with input buying growing at its fastest pace in over two years.
Despite efforts to increase capacity, backlogs of work rose, pointing to mounting pressure on firms to fulfill expanding order volumes.
On the cost front, the report noted a slight uptick in inflationary pressures in April, though overall price growth remains below 2024 levels. Higher raw material costs, local currency depreciation, and energy prices contributed to the increase in input costs.
Manufacturing firms bore the brunt of cost pressures, while output price inflation remained among the weakest recorded over the past two years.
“Inflation increased in April compared to March, exacerbated by the impact of local currency depreciation and higher energy costs,” Oni added. “However, it remains relatively subdued compared to last year, as some of the key drivers of inflation in 2024 have moderated.”
Looking ahead, businesses remain cautiously optimistic. While the outlook for future output remains positive, business confidence declined for a third straight month, weighed down by concerns over exchange rate volatility and global economic uncertainties.
Nonetheless, Stanbic IBTC Bank maintained a positive economic outlook for Nigeria in 2025, supported by sustained demand, investment intentions, and strategic expansion across sectors.