Key Points
- Private-sector activity strengthened in August as new orders recorded their fastest growth since early 2024.
- Output, purchasing activity and employment increased, while input and selling prices also rose.
- Stanbic IBTC expects strong 2026 growth despite persistent cost pressures and weaker business confidence.
Main Story
Nigeria’s private-sector business activity strengthened in August, with the Stanbic IBTC Purchasing Managers’ Index (PMI) rising to 54.3 from 52.5 in July, marking the seventh consecutive month of improving operating conditions.
The latest reading represented the joint-largest monthly improvement in more than two and a half years, according to the survey, which covered about 400 private-sector companies across agriculture, mining, manufacturing, construction, wholesale, retail and services.
The expansion was driven largely by stronger demand, with new orders recording their fastest increase since the beginning of 2024. Business output also continued to expand, extending its growth streak to 21 consecutive months, with agriculture and manufacturing recording particularly strong increases.
Companies also increased purchasing activity for the 21st consecutive month, with the pace reaching its fastest level since November 2025. Stocks of purchases recorded their strongest increase in nine months, while supplier delivery times shortened for the second consecutive month.
Employment increased for the 15th consecutive month, although the pace remained modest. Staffing levels rose across most sectors, while wholesale and retail companies recorded declines in employment. Backlogs of work also fell for the first time in seven months.
Despite the improvement in business activity, rising costs remained a major challenge for companies. Input prices increased sharply during the month, driven by higher fuel, transportation and raw-material costs, with manufacturers recording the strongest increase. Staff-cost inflation, however, eased to its lowest level in nine months.
Selling prices also increased as businesses passed some of the higher costs on to customers, with agriculture recording the fastest increase.
Muyiwa Oni, Head of Equity Research, West Africa, Stanbic IBTC, said the stronger PMI reflected improved demand, the introduction of new products and better availability of materials.
“Stronger demand, new products and improved availability of materials supported the expansion in business activity,” Oni said.
He said output had remained above the 50.0 growth threshold for 21 consecutive months, while businesses continued to plan additional hiring, expansion and export activity despite persistent input-cost pressures.
The report also showed that business confidence about future output remained positive, although it fell to a three-month low. Companies cited plans to open new locations, increase hiring, expand exports and grow their customer base as factors supporting their outlook.
The August PMI came as food inflation rose to 20.31 per cent year-on-year in July from 17.52 per cent in June, while headline inflation eased to 15.43 per cent from 15.91 per cent.
Stanbic IBTC expects Nigeria’s economy to grow by 4.1 per cent in 2026, supported mainly by the non-oil sector. The bank projects non-oil growth at 4.11 per cent, compared with 3.71 per cent in 2025, while oil-sector growth is projected to slow to 3.45 per cent from 8.50 per cent.
Manufacturing is expected to provide the biggest boost to growth, alongside services including information and communication technology, trade, real estate, and finance and insurance.
The Issues
The August PMI presents a stronger picture of private-sector activity, but the expansion remains uneven.
Demand and production are accelerating, yet employment is not increasing at the same pace. This suggests that businesses are responding to stronger orders without significantly expanding their workforces.
Rising fuel, transport and raw-material costs are another constraint. Companies are raising selling prices to absorb some of the additional costs, potentially adding to price pressures across the economy.
The improvement in supplier delivery times and the build-up in inventories, however, provide some support for businesses as they respond to stronger demand.
What’s Being Said
“The August PMI showed that private-sector activity remained in expansion territory for the seventh consecutive month.” — Muyiwa Oni, Head of Equity Research, West Africa, Stanbic IBTC Bank.
What’s Next
Businesses are expected to continue responding to stronger demand through increased production, purchasing and planned expansion.
Companies also cited plans to hire additional workers, expand into new locations and increase exports as factors supporting their future outlook.
Stanbic IBTC expects the strong PMI readings recorded in the third quarter to support full-year economic growth of 4.1 per cent in 2026.
The bank expects the non-oil economy to become a stronger contributor to growth, projecting non-oil expansion of 4.11 per cent compared with 3.71 per cent in 2025. Oil-sector growth is projected at 3.45 per cent, down from 8.50 per cent in 2025.
Manufacturing is expected to receive the biggest boost among the three broad sectors, while information and communications technology, trade, real estate, and finance and insurance are expected to support services growth.
Bottom Line
Nigeria’s private sector entered August on a stronger footing, with the PMI rising to 54.3 as new orders, output and purchasing activity accelerated.
But the expansion is taking place alongside higher business costs and modest employment growth. The key test will be whether stronger private-sector activity can translate into sustained investment, job creation and broader economic growth.
 rising ...){kind=link}