Susan Abayomi
Nigeria’s private sector recorded stronger growth in August, driven by a substantial increase in new orders and improved customer demand, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) compiled by S&P Global.
The headline PMI rose to 54.3 in August from 52.5 in July, signalling a solid improvement in private-sector business conditions. The latest expansion was the joint-strongest in more than two and a half years, matching the level recorded in March 2025.
Business conditions have now improved for seven consecutive months.
A major factor behind the August performance was the sharp rise in new orders. New business increased at its fastest pace since the beginning of 2024, with companies reporting stronger customer demand and the introduction of new products as key factors supporting growth.
In response to the stronger inflow of new orders, companies increased their business activity at a significantly faster pace than in July. Better availability of materials also contributed to the expansion.
Output has now increased for 21 consecutive months, with growth recorded across all four broad sectors monitored by the survey. Agriculture and manufacturing recorded particularly strong increases in activity.
Employment also continued to rise in August, extending the current period of job creation to 15 consecutive months. However, the pace of employment growth remained modest, while wholesale and retail businesses recorded a decline in staffing levels.
Companies also became more effective at managing their workloads, resulting in a decline in outstanding business for the first time in seven months.
Purchasing activity increased strongly during the month as businesses responded to improving demand and prepared for upcoming projects. The rate of input buying was the fastest since November 2025, while inventory accumulation reached a nine-month high.
Supplier delivery times also improved for the second consecutive month. Survey respondents attributed the faster deliveries to factors including prompt payments, stronger supplier relationships, increased competition among suppliers and improved logistics.
Despite the stronger business activity, cost pressures remained a concern. Input-price inflation increased during August, with businesses citing higher fuel and transportation costs as well as rising raw-material prices.
Staff-cost inflation, however, eased to its weakest level in nine months.
Companies also raised their selling prices at a faster rate as some businesses passed higher operating costs on to customers. The agricultural sector recorded the strongest increase in selling prices among the four sectors monitored.
Meanwhile, businesses remained optimistic about their future output, although confidence eased to a three-month low. Companies pointed to plans to expand into new locations, increase employment and enter export markets, as well as expectations of higher customer numbers, as reasons for their positive outlook.
The August PMI report indicates that Nigeria’s private sector continues to expand at a solid pace, supported by stronger demand and rising business activity, although persistent input-cost pressures remain a challenge for businesses.
