Nigerian businesses are maintaining strong confidence in the economy, despite a slight moderation in growth, as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) settled at 52.0 in January.
While lower than December’s 52.7, the index remained above the crucial 50.0 mark, signaling continued expansion in the private sector.
The latest PMI data shows that business activity and new orders grew for the second consecutive month, buoyed by improving customer demand and greater willingness to commit to new projects.
More significantly, business confidence soared to its highest level in over a decade, reflecting optimism about expansion plans and improved market conditions.
The PMI report read, “Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
“The headline PMI posted 52.0 in January, down from 52.7 in December but still above the 50.0 no-change mark and therefore signalling a second successive monthly improvement in the health of the Nigerian private sector.”
The report highlighted that three out of the four monitored sectors experienced growth, with wholesale and retail being the exception. Companies also reported faster supplier delivery times, thanks to improved vendor arrangements and quicker payment cycles.
While inflation remains a concern, January recorded the slowest rise in input prices since April 2024, with output charges increasing at the weakest pace in six months. Stanbic IBTC analysts project headline inflation to moderate further in 2025, with an expected average of 30.5% for the year, down from 33.18% in 2024.
Growth in Nigeria’s non-oil sector is projected at 3.2% year-on-year in 2025, up from 3.0% in 2024. Key drivers include manufacturing, trade, ICT, and financial services, while agriculture is expected to remain subdued due to security challenges and high input costs.
Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, emphasized that while growth has slightly slowed, business sentiment remains strong.
He said, “Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024. We note an increase in both output (53.7 vs December 2024: 54.8) and new orders (52.6 vs December 2024: 53.2) although slightly weaker than that seen at the end of 2024, on account of improving customer demand and more willingness to commit to new projects. Given the rising new orders, companies took on additional workers in January – representing the second month running in which this has been the case.”