Nigeria’s private sector continues to show resilience and confidence despite a slight slowdown in growth, as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) recorded 52.0 in January 2025. While this marks a decrease from December’s 52.7, the index remains above the critical 50.0 threshold, signaling continued expansion in business activities.
The latest PMI report highlights sustained business growth, driven by increased customer demand and a higher commitment to new projects. Business confidence has reached its highest level in over a decade, reflecting optimism about expansion opportunities and improved market conditions.
Key Indicators and Sectoral Performance
- Business Activity: Firms expanded operations in response to rising demand.
- New Orders: Increased for the second consecutive month, albeit at a slower pace than in December.
- Employment Growth: Companies hired more workers for the second straight month.
- Inflationary Pressures: Eased significantly, with input and output prices rising at a slower rate.
- Inventory Stockpiling: Reached an 18-month high as businesses sought supply chain stability.
Three of the four monitored sectors reported growth, with wholesale and retail being the only exception. Companies also benefited from improved supplier delivery times, thanks to better vendor relationships and quicker payment cycles.
Economic Outlook and Business Implications
Stanbic IBTC analysts project a further decline in inflation, with an expected annual average of 30.5% in 2025, down from 33.18% in 2024. The non-oil sector is expected to grow at 3.2% year-on-year, led by manufacturing, trade, ICT, and financial services, while agriculture remains challenged by security concerns and high input costs.
The report indicates that businesses are adapting to economic challenges with strategic hiring and expansion plans. The easing of inflationary pressures suggests a more stable cost environment, allowing firms to manage expenses and maintain profitability.
As Nigeria’s private sector remains on a growth trajectory, companies that prioritize innovation, efficiency, and market responsiveness are well-positioned to capitalize on emerging opportunities in 2025.
