Stanbic IBTC Bank
Abayomi Susan
Nigeria’s private sector maintained its growth momentum in July 2026, supported by another strong increase in new orders, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report compiled by S&P Global.
The report showed that stronger customer demand, competitive pricing and new product launches continued to drive business expansion during the month, leading to higher output, increased employment and greater purchasing activity. At the same time, inflationary pressures eased, providing some relief for businesses.
The headline PMI stood at 52.5 points in July, slightly lower than 53.4 points recorded in June but remaining above the 50.0 threshold that separates growth from contraction. This marked the sixth consecutive month of improvement in private sector business conditions, although the pace of expansion was the slowest recorded since March 2026.
Commenting on the report, Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, said businesses experienced stronger customer demand in July, while improved pricing strategies and new product introductions helped attract additional orders.
According to him, the sustained increase in demand kept private sector activity in expansion territory despite moderating compared with June. Businesses also increased input purchases to meet current demand and prepare for future workloads.
Oni noted that although input costs continued to rise, the rate of increase slowed to its weakest level in five months. Companies attributed higher costs mainly to fuel and raw materials, while selling price inflation also moderated in line with easing input cost pressures.
He further observed that Nigeria’s headline inflation eased slightly to 15.91 per cent year-on-year in June, compared with 15.93 per cent in May, ending three consecutive months of increases. While inflation is expected to rise slightly on a month-on-month basis in July, he projected that annual inflation could decline to around 15.72 per cent, largely due to favourable base effects.
Stanbic IBTC maintained its 2026 economic growth forecast of 4.1 per cent, projecting the oil sector to expand by 3.45 per cent year-on-year and the non-oil sector by 4.11 per cent.
However, the bank warned that several risks could weigh on the outlook, including insecurity affecting agricultural production, renewed exchange rate pressures, adverse weather conditions, rising fertiliser costs and continued uncertainty in the global economy that could weaken investor confidence and capital inflows.
The report indicated that new business expanded for the sixth straight month, with respondents attributing the growth to stronger customer demand, competitive pricing and successful product launches.
Higher demand also supported increased business activity, although output growth slowed to its weakest level since January. The agriculture and manufacturing sectors recorded the strongest output gains, while services and wholesale and retail businesses experienced more moderate growth.
Employment also increased during the month as firms hired additional workers to support rising production requirements. However, the pace of job creation eased to a three-month low.
Businesses continued to increase purchasing activity and build inventories to meet current workloads and prepare for future production needs. Despite these efforts, some companies reported that logistical challenges delayed project completion, resulting in a slight increase in outstanding business.
Supplier delivery performance improved during July after lead times had lengthened in the previous month.
The survey also showed that inflationary pressures continued to soften. Input costs and selling prices both rose at slower rates than in June, with purchase price inflation easing to its lowest level in five months. Fuel and raw material costs remained the main drivers of higher input prices, while staff costs increased at the slowest pace since April.
Selling price inflation also moderated to its weakest level since February. The agriculture sector recorded the fastest increase in selling prices, while the services sector experienced the slowest rate of price growth.
Looking ahead, businesses remained optimistic about future activity, with nearly half of respondents expecting output to increase over the next 12 months. Confidence was supported by planned business expansion, stronger marketing initiatives and the opening of new branches, although overall optimism eased slightly from the one-year high recorded in June.
