Nigeria’s private sector sustained its growth momentum in July, supported by another strong increase in new business, although the pace of expansion moderated from the previous month, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) compiled by S and P Global.
The headline PMI declined to 52.5 in July from 53.4 in June but remained above the 50-point threshold that separates expansion from contraction, signalling a sixth consecutive month of improving business conditions.
However, the latest reading represented the slowest pace of improvement in three months.
The report attributed the continued expansion to stronger customer demand, competitive pricing and the launch of new products, which helped businesses secure additional orders.
New business increased markedly for the sixth consecutive month, supporting further growth in business activity. However, output expanded at its slowest pace since January, with agriculture and manufacturing recording the strongest gains, while services and wholesale and retail posted more modest growth.
Employment also increased during the month as firms recruited additional staff to meet higher production requirements, although the pace of hiring eased to a three-month low.
Businesses expanded purchasing activity and increased inventories to meet current demand and prepare for future workloads. Despite these efforts, some firms reported logistical constraints that delayed project completion, leading to a slight rise in outstanding business.
Supplier delivery performance, however, improved after worsening in the previous survey period.
The survey also showed a further easing in inflationary pressures. Input costs and selling prices continued to rise but at slower rates than in June, with purchase cost inflation slowing to its weakest pace in five months despite higher fuel and raw material costs.
Commenting on the report, Head of Equity Research, West Africa at Stanbic IBTC Bank, Muyiwa Oni, said stronger customer demand, improved pricing and new product launches continued to support private sector activity.
‘Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June. Notably, the headline PMI settled at 52.5 points in July after the 53.4 points recorded in June, presenting the slowest since March 2026. Businesses also increased their input purchasing activity, linking this to efforts to keep up with current demand requirements and prepare for future workloads,’ he said.
Oni noted that firms increased purchases of production inputs to meet current demand and prepare for future workloads, while input cost inflation eased despite continued increases in fuel and raw material prices.
He added that the moderation in business costs aligns with the recent easing in headline inflation, which slowed to 15.91% year-on-year in June from 15.93% in May.
According to Oni, annual inflation is expected to moderate further to about 15.72% in July, largely due to favourable base effects, even though month-on-month inflation may rise.
He maintained Stanbic IBTC’s 2026 GDP growth forecast of 4.1%, with the oil sector projected to expand by 3.45% and the non-oil economy by 4.11%.
However, Oni cautioned that insecurity, exchange rate pressures, adverse weather conditions, higher fertiliser prices and global economic uncertainty remain key risks to Nigeria’s economic outlook.