Nigeria Private Sector Activity Slips Back Into Contraction

The Stanbic IBTC Bank Nigeria PMI fell to 49.7 in January 2026 from 53.5 in December, dipping below the 50-point mark and signaling broadly weaker business conditions after more than a year of expansion. New orders stagnated following a 14-month growth streak, limiting output to only marginal gains as demand softened at the start of the year. Purchasing activity and input stocks also increased at slower rates, especially in wholesale and retail, while agriculture, manufacturing, and services still recorded modest growth. Employment continued to edge higher for an eighth straight month, helping firms reduce backlogs. On the price front, cost pressures intensified. Purchase prices and staff costs both rose more quickly, prompting companies to lift selling prices at the fastest pace in four months, though inflation remained mild compared with post-pandemic peaks. Despite the slowdown, companies remained cautiously optimistic, expecting demand and activity to recover in the months ahead.

The Stanbic IBTC Bank Nigeria PMI eased slightly to 53.5 in December 2025, from 53.6 in November but signalling a solid monthly performance. New orders, output and purchasing activity all increased, reflecting higher customer demand. Employment also went up, but the rate of job creation remained marginal. Turning to prices, inflationary pressures picked up modestly in December but remained close to recent lows. Notably, there was a marked improvement in business confidence, as sentiment hit a six-month high, linked to planned investments in business expansions, including the opening of new branches and plans to boost product exports.

The Stanbic IBTC Bank Nigeria PMI fell to 53.6 in November 2025 from 54.0 in the previous month but still marked a full year of monthly expansion. New orders rose for the thirteenth straight month and at the fastest pace in three months, supported by new products and stronger customer demand. Output also continued to grow across all major sectors, aided by easing inflationary pressures. At the same time, employment increased modestly, and purchasing activity accelerated to a seven-month high, helping inventories rise at the fastest rate since mid-2023. Supplier delivery times continued to improve, though backlogs increased due to delayed payments. On the price front, input cost inflation softened to its lowest in almost five years, while output price inflation slowed to its weakest since April 2020. Despite better operating conditions, business confidence fell to its lowest since May, with optimism tied mainly to investment and expansion plans.