Nigeria’s non-oil private sector recorded its strongest expansion in nine months during May, as improving customer demand and a surge in new orders boosted business activity across key sectors of the economy, according to the latest Purchasing Managers’ Index (PMI) released by Stanbic IBTC Bank.
The headline PMI climbed to 54.1 in May from 52.4 in April, marking the highest reading since August 2025 and signaling a notable strengthening of business conditions. A PMI reading above 50 indicates expansion, while a figure below that threshold points to contraction.
The latest data suggest that businesses are benefiting from a gradual recovery in consumer spending and market activity following months of economic uncertainty and inflationary pressure.
Growth was recorded across all major sectors surveyed, including agriculture, manufacturing, wholesale and retail trade, and services. Companies reported a significant increase in output as new business inflows rose at the fastest pace in nine months.
Many firms attributed the improvement to stronger customer demand, targeted promotional campaigns, and the successful launch of new products aimed at attracting consumers in a highly competitive market.
The sharp rise in new orders is particularly significant because it often serves as a leading indicator of future production and investment activity. Businesses generally increase output when order books strengthen, creating positive spillover effects across supply chains.
Analysts at Stanbic IBTC said the May data point to a clear acceleration in private-sector momentum, with demand-side factors emerging as the primary driver of growth.
Despite the encouraging headline figures, businesses continue to face substantial operating challenges.
Fuel and transportation costs remained elevated during the month, contributing to ongoing inflationary pressures and increasing the cost of doing business. While overall input-price inflation eased to a three-month low, firms still reported significant cost burdens that could weigh on profitability.
At the same time, business confidence weakened, falling to its lowest level in a year. Many companies expressed concerns about the sustainability of recent demand gains and the broader economic environment.
Employment growth also remained subdued. Although workloads increased, firms largely refrained from aggressive hiring, preferring to manage higher demand with existing staff amid lingering uncertainty.
The May PMI report offers a positive signal for Nigeria’s economic outlook, indicating that private-sector activity is gaining momentum after a challenging period. However, economists caution that sustained growth will depend on continued improvements in consumer purchasing power, easing inflationary pressures, and stronger business confidence.
For now, the data suggest that Nigeria’s private sector is expanding at its fastest pace in months, but persistent cost pressures and cautious hiring indicate that the recovery remains a work in progress rather than a full-fledged economic resurgence.
