Nigeria’s private sector recorded stronger growth in May 2026 as business activity expanded at a faster pace, according to the latest Purchasing Managers’ Index (PMI) report released by Stanbic IBTC Bank.
The PMI rose to 54.1 in May from 52.4 in April, marking the fourth consecutive month of improvement. A reading above 50 indicates growth in business activity, suggesting that companies across the country are experiencing better operating conditions and increased demand.
The report highlighted stronger customer demand and the introduction of new products as major factors driving the improvement. These developments pushed both output and new orders to their highest levels in several months. Output reached a seven-month high, while new orders climbed to a nine-month high, reflecting growing confidence among consumers and businesses.
Growth was recorded across all key sectors covered by the survey, including agriculture, manufacturing, construction, information and communications technology (ICT), trade, and financial services. This broad-based expansion indicates that economic activity is improving across multiple industries rather than being concentrated in a few sectors.
As demand increased, businesses responded by purchasing more raw materials and building up inventories at a faster rate than in the previous month. Companies also benefited from improved supplier performance. Faster payments, better logistics arrangements, and improved road conditions helped reduce delivery times and supported smoother business operations.
Despite the positive performance, employment growth remained relatively modest. While firms continued hiring workers, extending a job creation trend that has lasted for over a year, recruitment levels were still lower than the pace of growth in output and new business orders.
The report also noted that outstanding workloads increased for the fourth straight month. Businesses cited factors such as delayed customer payments, shortages of materials, and power supply challenges as reasons for the buildup in unfinished work.
Inflationary pressures remained a concern, although there were signs of improvement. Rising fuel costs, partly linked to ongoing tensions in the Middle East, continued to increase production expenses and selling prices. However, the rate of inflation slowed compared to previous months. Purchase cost inflation eased to its lowest level in three months, while the rise in selling prices was the weakest recorded since February.
Commenting on the findings, Stanbic IBTC’s Head of Equity Research for West Africa, Muyiwa Oni, said the latest PMI figures reflect stronger business activity driven by higher output and increased demand. He added that although costs remain elevated, inflationary pressures have moderated for two consecutive months.
According to Oni, PMI data suggested that Nigeria’s economy grew by about 3.99 percent in the first quarter of 2026, slightly above the official 3.89 percent growth figure reported by the National Bureau of Statistics. He explained that the difference was mainly due to weaker-than-expected performance in the non-oil sector.
Looking ahead, Stanbic IBTC revised its 2026 economic growth forecast slightly downward to 4.13 percent from 4.22 percent. However, the bank remains optimistic that election-related spending, government investment initiatives, and infrastructure development projects will continue to support economic growth throughout the year.
The bank also maintained its forecast that Nigeria’s crude oil production will average 1.7 million barrels per day in 2026, compared to 1.64 million barrels per day in 2025, although production is not expected to reach two million barrels per day before 2030.
