Nigeria’s private sector returned to expansion in February, as the Stanbic IBTC Bank Purchasing Managers’ Index rose to 53.2 from 49.7 in January, signalling a renewed improvement in business conditions after a brief contraction at the start of the year.
The latest reading, released on Monday, indicates a solid monthly recovery in the health of the private sector, with business conditions improving continuously since December 2024, except for the January dip.
The PMI, compiled by S&P Global and endorsed by the National Bureau of Statistics (NBS), is a diffusion index where readings above 50.0 signal improvement compared to the previous month.
What the report says
The report read,
- “The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
- “After dipping below the 50.0 no-change mark in January, the headline PMI recovered from the reading of 49.7 to 53.2 in February.
- “As such, the latest data pointed to a solid monthly improvement in the health of the private sector. Except for January’s blip, business conditions have improved continuously since December 2024.”
The report noted that the rebound was driven primarily by a renewed increase in new orders, supported by improving customer demand and better product affordability
Anecdotal evidence from surveyed firms pointed to higher customer numbers and new product offerings, which fed into a marked rise in output at the fastest pace in four months
- All four monitored sectors recorded growth in February, with wholesale and retail returning to expansion after contracting in January.
- Employment also rose for the ninth consecutive month, with staffing levels increasing at the fastest pace since October 2025.
- Despite sustained hiring, backlogs of work increased at the fastest pace since May 2020, reflecting delayed client payments, staff and material shortages, as well as power supply challenges.
Companies responded to higher order volumes by expanding purchasing activity and inventory holdings markedly during the month.
Suppliers’ delivery times shortened further, helped by prompt payments and improved traffic conditions
Commenting on the data, Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, noted that stronger customer demand supported higher new product offerings at competitive pricing, with output and new orders regaining momentum in February.
Inflation pressures ease as naira strengthens
An appreciation of the naira contributed to a marked slowdown in inflationary pressures during the month.
- Purchase cost inflation eased to its weakest level in just over six years, although some firms still reported higher prices for animal feed and raw materials.
- Staff costs continued to rise, partly due to cost of living payments. With input cost pressures moderating, firms raised output prices at the slowest pace since January 2020
The report linked the softer price environment partly to the naira trading below N1,400 per dollar since late January, supported by stronger external accounts, higher offshore FX inflows and improved remittances, alongside Central Bank interventions to moderate currency appreciation.
Looking ahead, business sentiment improved in February, although it remained relatively muted.
- Advertising efforts and expansion plans were cited as key drivers of optimism over the next 12 months.
- Stanbic IBTC projects Nigeria’s real GDP to grow by 3.86% year on year in the first quarter of 2026 and 4.1% for the full year, supported by infrastructure spending, livestock development, easing trade constraints, investment in oil and gas and manufacturing, as well as forward linkages from the Dangote refinery.
The survey data were collected between February 10 and 25, 2026, based on responses from around 400 private sector firms across agriculture, mining, manufacturing, construction, wholesale, retail and services.
