Nigeria’s private sector recorded its strongest improvement in business conditions in 29 months in August 2026, driven by stronger new orders, increased output and improved customer demand.
The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) rose to 54.3 points in August, up from 52.5 in July, according to the latest report published on Tuesday.
The August reading was the joint-highest in more than two and a half years, matching the level recorded in March 2025, while extending the private sector’s expansion to seven consecutive months.
A PMI reading above 50 indicates an improvement in business conditions from the previous month, while a reading below 50 signals deterioration.
The survey, compiled by S&P Global and endorsed and adopted by the National Bureau of Statistics (NBS), was based on data collected between August 12 and 26.
Read Also:https://e247mag.com/abuja-court-adjourns-suit-seeking-to-stop-oyo-lg-elections/
New orders drive stronger private-sector activity
The report attributed the stronger performance in August largely to a surge in new orders, which increased at their fastest pace since the beginning of 2024.
Businesses linked the rise in orders to stronger customer demand and the introduction of new products. In response, companies increased their business activity at a significantly faster pace than in July, helped in part 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 recorded particularly strong increases during the month.
Improved demand also led businesses to increase purchasing activity at the fastest pace since November 2025, while inventory accumulation reached a nine-month high.
Employment rose for the 15th consecutive month, although the pace of job creation remained modest compared with the increase in orders and output.
While wholesale and retail firms reduced employment, staffing levels increased in the other sectors covered by the survey.
Despite the relatively modest pace of hiring, companies reduced their 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 remained firmly in expansion territory in August.
“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.”
Oni added that businesses remained positive about future output, with companies planning to hire more workers, expand into new locations and increase exports.
Higher costs remain a concern
The improvement in business activity came alongside renewed pressure from rising operating costs.
Purchase-cost inflation increased during August, reflecting higher fuel, transportation and raw-material prices. However, the rate remained below its 2026 average.
Staff-cost inflation, on the other hand, slowed to a nine-month low.
Businesses passed some of the increased costs on to consumers, resulting in faster growth in selling prices. Agriculture recorded the sharpest increase in charges among the sectors monitored.
Oni also noted that food inflation rose to 20.31 per cent year-on-year in July, from 17.52 per cent in June, even as headline inflation eased to 15.43 per cent from 15.91 per cent.
Stanbic projects 4.1% GDP growth in 2026
Stanbic IBTC said PMI readings for the third quarter so far point to stronger economic activity and could support 4.1 per cent GDP growth in 2026.
The bank projects that Nigeria’s non-oil sector will expand by 4.11 per cent this year, compared with 3.71 per cent in 2025.
Oil-sector growth, however, is projected to slow to 3.45 per cent from 8.50 per cent recorded in 2025.
Manufacturing is expected to receive a significant boost, partly due to a low statistical base from 2025.
ICT, trade, real estate, finance and insurance are also expected to remain major contributors to growth in the services sector.
Businesses maintained positive expectations for output over the next 12 months, although overall confidence fell to a three-month low.
Their outlook was supported by plans to expand into new locations, increase exports and employment, and attract additional customers.
Nigeria’s economy expands by 4.43% in Q2
The latest PMI report comes after the National Bureau of Statistics reported that Nigeria’s real Gross Domestic Product grew by 4.43 per cent year-on-year in the second quarter of 2026.
The figure was higher than the 4.23 per cent recorded in the corresponding quarter of 2025, representing a 0.20 percentage-point improvement.
The second-quarter performance was supported by stronger growth in the agriculture and services sectors, although industrial-sector growth slowed significantly compared with the same period in 2025.
The latest private-sector PMI reading suggests that business activity remained on an expansionary path as the third quarter progressed, although rising operating and food costs continue to pose challenges for businesses and consumers.