Nigeria’s Private Sector Growth Cools as PMI Eases in June

Quick Read:

• Stanbic IBTC PMI slips to 53.4 from May’s 54.1
• Business confidence hits highest level in a year
• Employment rises for 13th straight month

Nigeria’s private sector expanded for a fifth consecutive month in June, though the pace of growth moderated from May as manufacturing output contracted even as demand held firm across most other industries.

The Stanbic IBTC Bank Nigeria Purchasing Managers’ Index fell to 53.4 in June from 54.1 the previous month, according to data released Wednesday. A reading above 50 indicates expansion.

The slowdown followed a stretch of accelerating activity earlier in the second quarter, with new orders and output both rising at softer rates than in May.

Business activity expanded in three of the four broad sectors tracked by the survey, with manufacturing the lone exception.

Companies grew more optimistic about the year ahead even as current-month growth slowed. Sentiment climbed to its strongest level since June 2025, with firms pointing to new stock availability, expansion plans and advertising as reasons to expect higher output over the coming 12 months.

The improved outlook translated into hiring: employment rose for a 13th straight month, at the fastest pace since February, as firms expanded staffing, purchasing and inventories in step with demand.

Muyiwa Oni, head of equity research for West Africa at Stanbic IBTC Bank, said the quarter’s PMI readings point to continued economic acceleration.

“The PMI print during the quarter is consistent with a likely 3.94% y/y GDP growth rate in Q2:26, higher than the 3.89% y/y growth seen in Q1:26,” Oni said.

Stanbic IBTC is maintaining its 2026 growth forecast at 4.1%, with the oil sector expected to expand 3.45% year-on-year, down sharply from 8.50% growth in 2025, while non-oil growth is projected to accelerate to 4.11% from 3.71% last year, according to the bank.

Oni flagged several downside risks to the outlook, including insecurity that could disrupt food production, a resurgence of exchange-rate pressure, extreme weather affecting crop yields, and volatility in global capital flows.

Cost pressures persist, but ease from war-driven peak

Input costs and output prices both rose sharply again in June, though at a slower pace than immediately following the outbreak of the Israel-Iran war.

Purchase-price inflation eased to a four-month low even as fuel, raw-material and transportation costs continued climbing.

Staff costs rose at a sharper pace as firms sought to help workers manage living costs, and companies passed higher costs through to customers, with selling-price inflation ticking up from May.

Supply chains showed signs of strain: vendor lead times lengthened for the first time in a year, which firms attributed largely to poor road conditions.

Backlogs of work continued to build despite firms operating at higher capacity, driven by customer payment delays and ongoing power-supply issues.

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