Nigeria’s private sector sustained its growth momentum into the second quarter of 2025, as strong customer demand underpinned another solid expansion in business activity, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI®) report.
The headline PMI figure stood at 54.2 in April, broadly in line with the 54.3 recorded in March, marking the fifth consecutive month that the index remained above the 50.0 no-change threshold.
A reading above 50.0 signals an improvement in business conditions, while a figure below 50.0 indicates a deterioration.
The continued resilience in private sector performance reflected sharp growth in output and new orders, as well as increased hiring and purchasing activity among Nigerian firms.
Services sector leads as output reaches 15-month high
According to the report, output increased at the fastest pace since January 2024, driven by strengthening customer demand. All four broad sectors monitored — agriculture, manufacturing, services, and wholesale and retail recorded expansions, with the sharpest growth seen in the services sector.
Commenting on the development, Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, said:
“Nigeria’s private sector business activity maintained its positive momentum into the start of the second quarter of the year as the PMI settled at 54.2 in April – broadly in line with 54.3 recorded in March. This latest improvement in business activity was primarily due to improved customer demand amid softening inflationary pressures, helping to support higher new orders.”
In response to greater workloads, companies expanded their workforce, leading to a fifth consecutive month of job creation. Although the pace of employment growth was modest, it reached an eight-month high. Purchasing activity also saw a rapid acceleration, rising at the fastest rate since February 2022 as firms built up stocks to manage increased demand.
However, despite efforts to expand capacity, backlogs of work rose again in April, highlighting the continued pressure on firms to meet stronger order volumes.
“In line with this improvement, the employment level increased for the fifth consecutive month, although the pace of increase was modest this time,” Oni noted.
Inflationary pressures remain relatively muted
The survey showed that inflationary pressures ticked up in April compared to March, but remained subdued relative to 2024 levels. Higher raw material prices and the impact of local currency depreciation contributed to a faster rise in purchase costs. Staff costs also increased significantly during the month.
Oni explained,
“Elsewhere, inflationary pressures continue to soften relative to 2024 as factors that significantly drove prices upward last year have moderated so far this year in terms of impacts. Nonetheless, inflation increased in April compared to March, exacerbated by the impact of local currency depreciation and higher energy costs.”
Manufacturing firms experienced the strongest inflationary pressures among all sectors. The higher input costs were partly passed on to customers, resulting in a slight uptick in selling prices. However, output price inflation remained among the weakest seen over the past two years.
Despite the mild rise in inflation and lingering currency risks, businesses remained generally optimistic about future output, supported by investment plans and business expansion strategies. However, confidence dipped for the third straight month amid concerns about exchange rate fluctuations and global uncertainties.
Looking ahead, Stanbic IBTC Bank maintained a positive outlook for Nigeria’s economic performance in 2025.
