Nigerian Private Sector Ends 2025 With Strong Expansion Amid Demand Surge

The Nigerian private sector closed out 2025 in a strong growth position, driven by a significant surge in consumer demand that boosted output, new orders, and purchasing activity. According to the latest Purchasing Managers’ Index (PMI) report, business conditions improved for the thirteenth consecutive month, signaling a resilient recovery as the year drew to a close.

The headline PMI for December posted a solid 53.5, a figure that remains well above the 50.0 threshold that separates expansion from contraction. This latest reading is consistent with the annual average for 2025, suggesting a period of sustained stability for Nigerian businesses.

The growth observed in December was primarily fueled by a marked increase in new orders as customer demand remained robust. This uptick in sales marked the fourteenth consecutive month of expansion, allowing companies across all four broad economic categories to ramp up their production levels.

 The agricultural sector led this increase in output, followed closely by manufacturing, services, and construction. In response to the influx of new business, firms increased their inventory holdings and expanded their purchasing activity to ensure they could meet the rising market requirements.

While business activity flourished, the labor market saw more modest gains. Employment numbers did increase during December, but the rate of job creation was described as marginal and represented the slowest pace of hiring seen since June 2025.

Despite the cautious approach to recruitment, business confidence among private-sector firms improved sharply. Many companies expressed a much more optimistic outlook for 2026, anticipating that the current momentum in consumer demand will carry over into the new year.

The report also highlighted a slight pick-up in inflationary pressures. Higher raw material prices led to a more noticeable rise in purchase costs, causing the pace of inflation to quicken after reaching recent lows in November. Additionally, staff costs increased as firms paid employees for extra hours worked to manage the growing volume of orders.

To protect their margins, companies responded by raising their own selling prices, with the manufacturing sector recording the sharpest increase in charges. However, the report noted that overall inflation remains among the weakest levels recorded in the past six years.

Operational challenges persisted toward the end of the year, as some firms reported a slight rise in backlogs of work. These delays were attributed to material shortages and inconsistent power supply. Furthermore, while suppliers’ delivery times continued to shorten, they did so at the slowest rate in six months, hampered by reports of poor road conditions in several regions.

Muyiwa Oni, Head of Equity Research for West Africa at Stanbic IBTC Bank, noted that while the PMI moderated slightly from November’s 53.6, the continued expansion reflects a healthy appetite from consumers that is encouraging firms to keep investing in their operations.