By Boluwatife Oshadiya | June 2, 2026
Key Points
- Stanbic IBTC PMI rose to 54.1 in May from 52.4 in April, the highest reading in nine months
- Stronger customer demand and new product launches boosted output and new orders
- Inflation pressures remained elevated, though cost increases softened from April levels
Main Story
Nigeria’s private sector recorded its strongest performance in nine months in May as business activity accelerated on the back of stronger customer demand and increased new orders, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI) compiled by S&P Global.
The headline PMI rose to 54.1 in May from 52.4 in April, marking the fourth consecutive month of expansion and the strongest improvement in business conditions since August 2025. A PMI reading above 50 indicates growth in private sector activity.
The report showed that output and new orders expanded at faster rates during the month, reaching seven-month and nine-month highs respectively. Businesses attributed the improvement to stronger consumer demand, new product introductions, and broader economic activity across major sectors.
Companies responded by increasing purchasing activity and building inventories in anticipation of future demand. Improved supplier performance, better road conditions, and quicker payments also contributed to faster delivery times.
Despite the stronger growth momentum, employment gains remained modest. Businesses also reported rising backlogs due to payment delays, power supply challenges, and shortages of critical materials.
Input costs continued to increase, largely driven by higher fuel prices linked to tensions in the Middle East. However, both input cost inflation and output price inflation eased compared with April, suggesting some moderation in pricing pressures.
According to data from the National Bureau of Statistics, Nigeria’s economy expanded by 3.89% year-on-year in the first quarter of 2026, supported primarily by agriculture, manufacturing, trade, finance, construction, and information and communication sectors.
What’s Being Said
“Private sector activity in Nigeria improved to its best level in nine months, with the headline PMI rising to an impressive 54.1 points in May from 52.4 points in April,” said Muyiwa Oni.
“This impressive business condition was primarily due to accelerated expansion in both output and new orders as evidence pointed to improving customer demand and the launch of new products,” Oni added.
S&P Global noted that firms remained optimistic about future output growth, supported by expansion plans, new product development, and increased investment in marketing activities.
What’s Next
- Businesses will continue monitoring fuel costs and broader inflation trends in the second half of 2026
- Analysts expect non-oil sector activity to remain supported by infrastructure spending and investment attraction initiatives
- Stanbic IBTC forecasts crude oil production to average 1.7 million barrels per day in 2026
- Market participants will watch future PMI readings for confirmation that growth momentum is becoming more broad-based
Bottom Line
The Bottom Line: Nigeria’s private sector is showing stronger resilience despite persistent inflationary pressures and infrastructure constraints. The latest PMI reading suggests demand is recovering, but sustaining that momentum will require greater stability in energy costs, power supply, and broader macroeconomic conditions.
