Nigeria’s private sector maintained its growth trajectory in June 2026, extending its expansion streak to five consecutive months, although the pace of activity moderated amid persistent inflationary pressures and higher operating costs.
The latest Stanbic IBTC Purchasing Managers’ Index (PMI) showed the headline index eased to 53.4 in June from 54.1 recorded in May. Despite the slight decline, the reading remained comfortably above the neutral 50.0 threshold, signalling continued improvement in overall business conditions across the economy.
The PMI, a leading indicator of economic activity based on surveys of purchasing managers, measures changes in output, new orders, employment, supplier delivery times and inventories. A reading above 50 indicates expansion, while a figure below 50 signals contraction.
Business activity continued to benefit from stronger customer demand and the introduction of new products, helping firms record further increases in output and new orders. Companies also expanded their workforce for the thirteenth consecutive month, with hiring accelerating to its strongest pace since February as businesses positioned themselves to meet growing demand.
Business confidence improved significantly during the month, reaching its highest level in a year. Survey respondents attributed the stronger optimism to planned business expansion, increased marketing efforts and expectations of sustained customer demand over the coming months.
However, growth remained uneven across industries. Manufacturing emerged as the only broad sector to record a contraction in June, highlighting lingering challenges facing industrial producers amid elevated production costs and supply chain pressures.
Input cost inflation also remained a major concern for businesses. Companies reported substantial increases in fuel prices, transportation expenses and raw material costs, forcing many firms to raise selling prices in an effort to protect profit margins. Although firms were able to pass part of the higher costs on to customers, persistent inflation continues to weigh on business operations and consumer purchasing power.
Stanbic IBTC estimates that the latest PMI readings are consistent with Nigeria’s economy expanding by approximately 3.94% year-on-year in the second quarter of 2026, slightly above the 3.89% growth recorded in the first quarter. The bank maintained its full-year GDP growth forecast of 4.1% for 2026 but cautioned that downside risks remain.
According to Muyiwa Oni, Head of Equity Research, West Africa at Stanbic IBTC Bank, “Although the rate of growth slowed in June compared to May, Nigeria’s private sector witnessed an increase in output at the end of Q2 2026 as higher demand and new product development supported an increase in sales volume for companies.”
Looking ahead, analysts say sustaining business momentum will depend on moderating inflation, improving foreign exchange stability, easing insecurity and maintaining policy reforms aimed at strengthening investor confidence. While private sector resilience continues to support economic growth, persistent cost pressures and external uncertainties remain key challenges for businesses in the second half of the year.
