By Boluwatife Oshadiya | August 4, 2026
Key Points
- Nigerian private sector PMI eased to 52.5 in July from 53.4 in June but remained above the 50-point expansion threshold
- Strong customer demand, competitive pricing and new product launches drove another marked increase in new orders
- Inflationary pressures softened as both input costs and selling prices rose at slower rates than in June
Main Story
Nigeria’s private sector remained on a growth path in July, with the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) recording 52.5, marking the sixth consecutive month of improving business conditions despite a moderation from 53.4 recorded in June.
The latest PMI survey showed that stronger customer demand, alongside competitive pricing strategies and new product launches, continued to support business expansion across the economy. Although the pace of growth slowed to its weakest level in three months, the reading remained comfortably above the neutral 50.0 threshold, signalling continued expansion in private sector activity.
The improvement in demand translated into another marked increase in new business, prompting firms to expand production, recruit additional staff and increase purchasing activity to meet current and anticipated workloads.
Output rose across all four monitored sectors, with the strongest gains recorded in agriculture and manufacturing, while services and wholesale & retail posted more modest increases.
Employment also increased during the month, although hiring slowed to a three-month low as businesses adopted a measured approach to workforce expansion.
Companies further boosted input purchases and inventory levels in preparation for future demand. However, survey respondents noted that logistical bottlenecks continued to delay project completion, leading to a slight increase in outstanding business despite an improvement in supplier delivery performance.
The report also pointed to easing inflationary pressures during July. Input costs increased at the slowest pace in five months, while selling price inflation moderated to its weakest level since February. Businesses nevertheless continued to face elevated fuel and raw material costs, although staff cost inflation softened further.
What’s Being Said
Commenting on the report, Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, said improving consumer demand remained the key driver of business activity.
“Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June,” Oni said.
He noted that firms also increased purchasing activity to meet current demand and prepare for future workloads, while inflationary pressures continued to ease.
According to Oni, Stanbic IBTC expects Nigeria’s headline inflation to decline further on a year-on-year basis to around 15.72% in July, supported largely by favourable base effects despite anticipated month-on-month price increases.
“We retain our 2026 growth forecasts at 4.1% as we see the oil sector growing by 3.45% year-on-year in 2026, while the non-oil sector is likely to grow by 4.11%,” he added.
However, he warned that persistent insecurity, renewed exchange rate pressures, adverse weather conditions, rising fertiliser costs and global economic uncertainty remain key downside risks to Nigeria’s growth outlook.
What’s Next
- Investors will closely monitor the release of Nigeria’s official July inflation data to determine whether easing price pressures continue.
- Businesses are expected to assess whether stronger customer demand can be sustained into the third quarter amid lingering cost and logistics challenges.
- Markets will also watch for any monetary policy implications if inflation continues to moderate while private sector activity remains in expansion territory.
Bottom Line: Nigeria’s private sector continues to demonstrate resilience despite moderating growth momentum. While softer inflation and stronger demand provide encouraging signals for businesses, sustaining the recovery will depend on easing structural constraints such as logistics disruptions, exchange rate stability and persistent cost pressures.
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