KEY POINTS

• Nigeria’s Composite Purchasing Managers’ Index (PMI) rose to 53.2 points in October from 53.0 points in September.
• Business activity expanded in 24 of the 32 subsectors surveyed by the Central Bank of Nigeria.
• Industry and Agriculture recorded stronger readings, while Services slowed slightly.
• Manufacturing PMI improved to 52.4 points as production, new orders and employment increased.
• Rising input and output prices remain a concern for businesses despite improving economic activity.

MAIN STORY

Business activity in Nigeria strengthened slightly in October 2026, with the Composite Purchasing Managers’ Index (PMI) rising to 53.2 points from 53.0 points in September, according to the latest report by the Central Bank of Nigeria (CBN).

The improvement indicates that private sector activity continued to expand, with 24 of the 32 subsectors surveyed recording growth during the month.

A PMI reading above 50 points indicates expansion, while a reading below that level signals contraction. October’s result therefore points to continued growth in business activity, although the increase from September was marginal.

Agriculture and Industry recorded stronger performances, with their respective PMI readings rising to 54.7 points from 53.1 points and 52.6 points from 52.0 points.

The improvement in Industry was supported by stronger production, new orders and employment. Their respective indices increased to 53.5, 52.1 and 52.7 points, compared with 53.2, 51.7 and 51.1 points in September.

Manufacturing also gained ground, with its PMI rising to 52.4 points from 51.7 points. Cement, Motor Vehicles and Assembly, and Oil Refining were among the subsectors recording notable improvements.

Agricultural activity remained strong, supported by general farming and new orders, whose indices rose to 56.8 and 55.6 points respectively. Livestock recorded the highest subsector PMI at 56.4 points.

Services was the only major sector to record a moderation in its PMI, which eased to 52.7 points from 53.2 points. The slowdown reflected weaker growth in new orders and inventories, although overall business activity and employment continued to expand.

THE ISSUES

The October figures suggest that the recovery in business activity is spreading across several parts of the economy, rather than being driven by a single sector.

Stronger manufacturing production and new orders are particularly important because they indicate improving demand for locally produced goods. If sustained, this could encourage manufacturers to increase output, make greater use of existing production capacity and employ more workers.

Agriculture’s performance also provides a positive signal for domestic production, with stronger farming activity and new orders pointing to continued expansion in the sector.

However, rising business costs remain a major concern. The Composite Input Price Index increased to 64.0 points from 63.3 points, while the Output Price Index rose to 58.9 points from 58.4 points.

These increases indicate that businesses continued to face higher costs for inputs and adjusted their selling prices accordingly.

For manufacturers and other businesses, this creates a difficult balance. Higher orders can support revenue, but rising production costs may reduce the benefits if businesses cannot maintain their profit margins.

The slight slowdown in Services also shows that the recovery is not uniform across the economy.

WHAT’S NEXT

The near-term outlook points to a gradual continuation of economic expansion, supported by agricultural activity and improving industrial conditions.

The key indicators to watch are manufacturing production, new orders and employment. Continued improvement in these areas would provide stronger evidence that the recovery is translating into increased domestic output.

However, the ability of businesses to manage input costs will determine how much of the improvement in demand translates into stronger profitability and sustainable expansion.

BOTTOM LINE

Nigeria’s October PMI points to a gradually strengthening economy, with Agriculture and Industry leading the improvement. But higher input and selling prices remain a threat to the durability of the recovery. The real test will be whether businesses can turn stronger demand into more production, jobs and profits without being overwhelmed by rising costs.