Stanbic IBTC PMI: Nigeria’s private sector expands for fifth consecutive month in June

Nigeria’s private sector sustained its growth momentum in June 2026, marking the fifth consecutive month of expansion as stronger customer demand and new product offerings continued to drive business activity.

This according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI).

The PMI eased slightly to 53.4 in June from 54.1 in May butn remained comfortably above the 50.0 threshold that separates expansion from contraction, indicating that business conditions continued to improve at the end of the second quarter.

The report attributed the expansion to rising customer demand, increased new orders and continued business growth, although the pace of improvement moderated compared to the previous month.

What the report is saying

The latest Stanbic IBTC PMI showed that improving demand supported further increases in output, new orders and employment across most sectors of the economy.

• The headline PMI stood at 53.4 in June, down slightly from 54.1 in May, signalling the fifth straight month of improvement in business conditions.
• Output and new orders increased further during the month as firms reported stronger customer demand and the introduction of new products, although growth rates slowed compared to May.
• Business activity expanded across three of the four sectors covered by the survey, with manufacturing being the only sector to record a contraction.
• Companies increased staffing levels for the 13th consecutive month, while purchasing activity and inventories also rose in response to higher workloads and expectations of future growth.

The report also noted that business confidence strengthened to its highest level since June 2025, supported by expansion plans, advertising efforts and improved inventory positions.

Commenting on the report, Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said the latest PMI suggests Nigeria’s economy maintained positive momentum during the second quarter despite a moderation in the pace of expansion.

• “Although the rate of growth slowed in June compared to May, Nigeria’s private sector witnessed an increase in output at the end of Q2 2026 as higher demand and new product development supported an increase in sales volume for companies.”
• “This rising demand led to higher workload, thereby ensuring the private sector hired new staff across three of the four sectors monitored by the survey besides agriculture.”
• “The PMI print during the quarter is consistent with a likely 3.94% year-on-year GDP growth in Q2 2026, higher than the 3.89% recorded in Q1 2026.”
• “We retain our 2026 GDP growth forecast at 4.1%, although risks remain from insecurity, exchange rate pressures, adverse weather conditions, higher fertiliser prices and a volatile global environment.”

He added that while input costs continued to rise due to higher fuel, transportation and raw material prices, inflationary pressures were less severe than those experienced during the onset of the recent Middle East conflict.

More insights

The report showed that firms continued to expand operations despite persistent cost pressures and supply chain challenges.

• Purchasing activity remained strong, matching May’s pace, while inventories increased as businesses prepared for higher demand.
• Backlogs of work continued to rise, reflecting customer payment delays, electricity supply challenges and longer supplier delivery times caused largely by poor road conditions.
• Input costs increased sharply due to higher fuel, transportation and raw material prices, although purchase price inflation eased to a four-month low.
• Selling prices also increased as businesses passed part of the higher operating costs on to customers.

Despite the moderation in output growth, firms remained optimistic about business prospects over the next 12 months, with confidence reaching its highest level in a year.

What you should know

The Stanbic IBTC Purchasing Managers’ Index (PMI) is one of the most closely watched indicators of business activity in Nigeria’s non-oil economy.

A PMI reading above 50.0 indicates improving business conditions compared to the previous month, while a reading below 50.0 signals a contraction.

Stanbic IBTC expects Nigeria’s economy to expand by 4.1% in 2026, with non-oil activities projected to remain the primary driver of growth despite risks from insecurity, exchange rate volatility and global economic uncertainty.