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Nigeria’s private sector recorded its strongest improvement in business conditions in 29 months in August 2026, driven by a surge in new orders, stronger output and improved customer demand.
The headline Stanbic IBTC Bank Nigeria Purchasing Managers’ Index rose to 54.3 points in August from 52.5 points in July, according to the latest report published on Tuesday.
The reading was the joint-highest in just over two-and-a-half years, matching the level recorded in March 2025, while extending the expansion in business conditions to seven consecutive months.
A PMI reading above 50 indicates an improvement in business conditions compared with the preceding month, while a reading below 50 signals deterioration.
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The survey, compiled by S&P Global and endorsed and adopted by the National Bureau of Statistics, was based on data collected between August 12 and 26.
What the report says
The report read, “The headline PMI rose to 54.3 in August, up from 52.5 in July and signalling a solid monthly strengthening in the health of the Nigerian private sector. Moreover, the latest improvement was the joint-largest in just over two-and-a-half years, equal with that seen in March 2025.”
The stronger August performance was largely driven by new orders, which increased at their fastest pace since the beginning of 2024.
- Companies attributed the improvement to stronger customer demand and the launch of new products. In response, firms increased business activity at a much faster pace than in July, supported partly by improved availability of materials.
- Output has now expanded for 21 consecutive months, with all four broad sectors covered by the survey recording growth. Agriculture and manufacturing posted particularly strong increases.
- Improved demand also pushed companies to increase purchasing activity at the fastest pace since November 2025, while inventory accumulation reached a nine-month high.
- Employment increased for the 15th consecutive month, although job creation remained modest relative to the growth in orders and output. Wholesale and retail businesses reduced employment, while staffing increased elsewhere.
- Despite the modest hiring, companies reduced backlogs of work for the first time in seven months.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, said, “Private sector activity in Nigeria was in an expansionary territory for the seventh consecutive month, rising to 54.3 points in August from 52.5 points recorded in July.”
He added that businesses remained optimistic about future output, with plans to hire workers, enter new locations and expand exports.
Rising costs pressure businesses
The acceleration in economic activity was accompanied by higher operating costs.
- Purchase cost inflation increased in August, reflecting higher fuel, transportation and raw material prices, although the rate remained below its 2026 average. Staff cost inflation, however, slowed to a nine-month low.
- Businesses passed part of the higher expenses to customers, causing selling price inflation to accelerate. Agriculture recorded the fastest increase in charges among the sectors monitored.
Oni noted that food inflation increased to 20.31% year-on-year in July from 17.52% in June, despite headline inflation easing to 15.43% from 15.91%.
Stanbic sees 4.1% GDP growth
Stanbic IBTC said the PMI readings so far in the third quarter point to stronger economic activity and could support 4.1% GDP growth in 2026.
The bank expects the non-oil sector to expand by 4.11% in 2026, up from 3.71% in 2025, while oil-sector growth is projected to slow to 3.45% from 8.50%.
Manufacturing is expected to receive the strongest growth boost due partly to a low 2025 statistical base, while ICT, trade, real estate, finance and insurance are expected to remain major drivers of the services sector.
Businesses remained optimistic about output over the next 12 months, although confidence slipped to a three-month low. Their expectations were supported by plans to expand into new locations, increase exports and employment, and attract more customers.
What you should know
Nairametrics earlier reported that Nigeria’s Gross Domestic Product (GDP) grew by 4.43% year-on-year in real terms in the second quarter of 2026, up from 4.23% recorded in the corresponding quarter of 2025, according to the National Bureau of Statistics (NBS).
The latest growth rate represents a 0.20 percentage-point improvement from a year earlier, pointing to a modest expansion in overall economic activity.
The performance was supported by stronger growth in agriculture and services, while growth in the industrial sector slowed significantly compared with the same period in 2025.
