By Chinwendu Obienyi
Nigeria’s Purchasing Managers’ Index (PMI) rose to 54.3 points in March 2025, marking its fourth consecutive month of expansion and the strongest improvement in business conditions since January 2024, the latest monthly PMI report from Stanbic IBTC revealed on Tuesday.
This growth was driven by easing inflationary pressures and increased domestic demand, which boosted output and new orders across key sectors such as agriculture, manufacturing, services, and wholesale and retail.
The month of February 2025 had seen the figure stood at 53.7 points. A PMI above 50.0 signals an expansion in business activity, while a reading below that threshold indicates a contraction.
As input cost recorded its slowest pace since May 2023 amid easing inflationary pressure, Nigeria’s business activities reported its no-change mark for the fourth consecutive month.
This is as the latest improvement in business conditions in the private sector was solid and the most marked since the start of 2024.
The report noted that March’s uptick reflects a solid improvement in business conditions for the fourth consecutive month, driven by a sharp increase in new orders – the fastest in 14 months.
According to the report, the private sector’s performance was buoyed by stronger domestic demand, resulting in expanded output across all major sectors, including manufacturing, trade, and real estate.
Additionally, it said employment levels saw a modest rise, marking the most substantial increase in seven months. While some firms resorted to contract-based hiring, the overall job market sentiment remained positive.
One of the most notable findings in the report was the decline in input cost inflation, which reached its lowest level since May 2023.
According to the Nigerian Bureau of Statistics (NBS), the headline inflation rate eased to 23.18 per cent in February, a decrease of 1.30 per cent compared to the 24.48 per cent recorded in January.
The report said that “all items less farm produce and energy’’ or core inflation, which excluded the prices of volatile agricultural produce and energy, stood at 23.01 per cent in February on a year-on-year basis.
“This decreased by 2.12 per cent compared to 25.13 per cent recorded in February 2024.
The report added that softer price pressures encouraged firms to stockpile inputs, anticipating stable cost conditions in the coming months.
It said, “As inflationary pressures eased, the pace of price increases for goods and services slowed for the third consecutive month.
Softening inflationary pressures are helping to improve domestic demand conditions, in turn supporting an overall improvement in private sector activity. Consequently, private sector activity strengthened for the fourth consecutive month”.