Nigeria’s private sector posts strongest growth in 4.5 years years

Nigeria’s private sector recorded its strongest growth in more than four years in September, as stronger customer demand and increased orders pushed businesses to produce more goods and services.

This was contained in the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report released on Thursday.

The PMI, which is a monthly survey of about 400 private-sector companies, rose to 56.4 points in September, from 54.3 points in August. It was the highest reading since February 2022.

Simply put, a PMI reading above 50 means businesses are doing better than they did in the previous month, while a reading below 50 means business activity is getting weaker.

The September figure, therefore, shows that Nigerian businesses experienced a significant improvement in activity during the month.

A major reason was the increase in new orders, meaning more customers were buying goods and services from companies.
New orders increased for the eighth consecutive month and recorded their strongest growth since February 2022.

Businesses also reported higher output, with all four sectors covered by the survey recording growth.

As customers placed more orders, companies increased their purchases of raw materials and other inputs needed for production. The pace of purchasing was the fastest since February 2022.

Some companies also bought more materials in anticipation of stronger demand in the months ahead.

This led to a significant increase in the amount of goods and materials stored by businesses. The report said the increase in inventories was the fastest since the end of 2021.

The supply situation also improved. Suppliers delivered goods faster for the third consecutive month, with companies saying prompt payment to suppliers helped to speed up deliveries.

Businesses also employed more workers in September as they tried to cope with increased orders. However, the rate of job creation remained modest, with many of the new workers employed temporarily to complete specific projects.

Despite the increase in business activity, companies continued to face rising costs.
The report said the cost of inputs such as fuel, transportation, raw materials, animal feed and food products increased sharply during the month.

Staff costs also rose as some companies increased salaries or paid incentives to workers to help them cope with higher living costs and complete projects on time.

As their costs increased, businesses passed part of the burden on to their customers by raising the prices of their goods and services.

The rate at which businesses increased their selling prices reached a three-month high in September, with just over 24 per cent of companies surveyed reporting higher prices.

Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, said the September performance showed a significant improvement in overall business conditions.

According to him, the strong performance in September meant that business activity in the third quarter was better than in the second quarter.

Oni said the performance was consistent with an estimated 4.56 per cent growth in Nigeria’s economy in the third quarter of 2026.

He also projected that the economy could grow by about 4.4 per cent in the full year 2026, compared with 3.87 per cent recorded in 2025.
He said the non-oil sector was expected to perform better this year, with manufacturing likely to record a significant improvement. He also identified ICT, trade, real estate, finance and insurance as key drivers of growth in the services sector.
Meanwhile, Nigerian businesses became more confident about their prospects over the next 12 months.
Some companies are planning to expand by opening new branches, attracting new customers, increasing their stocks and, in some cases, beginning to export their products.

The PMI survey covers companies in agriculture, mining, manufacturing, construction, wholesale, retail and services. It is compiled by S&P Global from responses from about 400 private-sector companies.
The Stanbic IBTC Bank Nigeria PMI is endorsed and adopted by the National Bureau of Statistics (NBS).

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