Report: Agriculture, Manufacturing Lead in Output Expansion as Price Inflation Ticks Higher

Dike Onwuamaeze

Agriculture and manufacturing took the lead in output expansion as price inflation ticks higher in August.

This is reported in the Purchasing Managers’ Index (PMI) of the Stanbic IBTC, which showed that the headline index rose to 54.3 in August, up from 52.5 in July.

This, according to the report, signalled a solid monthly strengthening in the health of the Nigerian private sector.

It said the latest improvement was the largest in just over two-and-a-half years, and only equal with that seen in March 2025.

“August data pointed to stronger expansions in both output and new orders in the Nigerian private sector. Output increased across all four broad sectors covered by the survey, with rates of expansion particularly marked in the agriculture and manufacturing categories. Business activity increased for 21 successive months, and at a marked pace that was the fastest since May,” the report said.

It said that key factors leading to the latest rise in output higher new orders were the introduction of new products and some firms’ effort to grow activity.

“The provision of new products and improving customer demand meanwhile contributed to a sharp increase in new orders. New business has now risen in seven successive months, with the latest expansion the joint-strongest in just over two-and-a-half years, equal with that seen in August 2025,” the PMI said.

It reported that input costs have continued to rise sharply in August, with companies raising their selling prices accordingly.

The latest rise in overall input prices was slightly faster than in the previous survey period.

According to the report, manufacturing posted the sharpest increase, with services recording the slowest rise.

“In line with the picture for overall input prices, purchase cost inflation also quickened in August. Higher fuel prices were widely mentioned, pushing up transportation costs. Some firms also reported rising raw material prices. Wages meanwhile increased slightly in August, and at the slowest pace in nine months.

“Where companies raised staff pay, they linked this to efforts to motivate workers to finish jobs more quickly, and cost-of-living payments. Higher costs led companies to increase their selling prices accordingly in August. In line with the picture for input prices, the pace of charge inflation ticked up from July and was sharp. Agriculture posted the fastest rise in output prices,” the PMI said.

Commenting on the report, the Head of Equity Research West Africa at Stanbic IBTC Bank, Mr. Muyiwa Oni, said companies reported availability of materials as a factor that supported overall growth in August, with output now rising above the 50.0 points expansionary threshold for the 21st consecutive month.

Oni said that companies also remained positive on future output as they plan to hire more workers, export to other countries and expand into new locations amid an expectation of higher customer numbers.

According to him, “Meanwhile, 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.

“Indeed, food prices, at 20.31 per cent y/y as of July from 17.52 per cent y/y in June, have maintained an uptrend for the sixth consecutive month despite headline inflation moderating for the second consecutive month to 15.43 per cent y/y in July against June’s 15.91 per cent y/y.”

He added, “We expect the manufacturing sector to see the biggest boost to its growth amid the low statistical base effects from 2025 while ICT, trade, real estate, and finance & insurance will likely remain the biggest drivers of the services sector’s growth.”