Nigeria’s private sector expanded at its fastest pace in nearly two and a half years in August, driven by a sharp increase in new orders and stronger business activity, the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) has shown.
The headline PMI rose to 54.3 points in August 2026, from 52.5 points in July, marking the seventh consecutive month of expansion and the joint-strongest improvement in business conditions in just over two and a half years.
The latest reading was equal to the expansion recorded in March 2025, according to the report compiled by S&P Global for Stanbic IBTC Bank.
The survey also showed that new orders increased substantially in August, with growth reaching its highest level since the beginning of 2024. Respondents attributed the stronger demand to improved customer orders and the launch of new products.
The rise in new orders encouraged companies to increase output, with business activity expanding at its fastest pace since May. Output has now increased for 21 consecutive months, with agriculture and manufacturing recording particularly strong growth.
Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, said improved demand, new products and better availability of materials supported the expansion.
“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 companies remained optimistic about future output, with plans to hire more workers, expand into new locations and increase exports amid expectations of higher customer numbers.
Employment also increased for the 15th consecutive month, although the pace of job creation remained modest. Wholesale and retail businesses recorded a decline in staffing, while employment increased in the other sectors surveyed.
Despite the limited increase in employment, companies managed to reduce their outstanding workloads for the first time in seven months.
The stronger demand also prompted businesses to increase purchasing activity at the fastest rate since November 2025. Inventories rose at their fastest pace in nine months as companies stocked up on inputs for current and expected projects.
Supply chain conditions improved as suppliers delivered goods faster for the second consecutive month. Respondents attributed the improvement to better relationships with suppliers, prompt payments, stronger competition among vendors and improved logistics.
However, cost pressures remained a concern. Input prices increased at a slightly faster pace in August, largely due to higher fuel, transportation and raw material costs.
Although staff costs continued to rise, the pace of wage inflation slowed to its weakest level in nine months.
Companies subsequently raised their selling prices, resulting in a faster increase in output price inflation. The agriculture sector recorded the sharpest increase in selling prices among the four broad sectors monitored.
Oni said the increase in food prices remained a concern despite the moderation in headline inflation.
“Input prices maintained an uptrend on account of higher transportation costs and increase in prices of raw materials. In line with this, output prices also maintained an uptrend, with the agricultural sector seeing the biggest jump in prices,” he said.
He noted that food inflation rose to 20.31 per cent year-on-year in July from 17.52 per cent in June, even as headline inflation moderated to 15.43 per cent from 15.91 per cent.
Oni said the PMI figures for the third quarter so far pointed to strong economic growth in the quarter and could support a 4.1 per cent growth rate for Nigeria’s gross domestic product in 2026.
He projected that the non-oil sector would outperform the oil sector, with manufacturing expected to receive the biggest boost, while ICT, trade, real estate, and finance and insurance would remain key drivers of services-sector growth.
The PMI is based on responses from about 400 private-sector companies across agriculture, mining, manufacturing, construction, wholesale, retail and services.
A PMI reading above 50 indicates an expansion in private-sector activity, while a reading below 50 signals contraction.
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