Nigeria’s business activity sees fastest growth in one year

…employment increases only marginally amid staff cost pressures

Nigeria’s business activities have witnessed its fastest growth since 2024 as economic reforms pay off.

The latest monthly PMI by Stanbic IBTC Bank released on Monday showed the headline index increased to 53.7 in February from 52.0 reported in January.

According to the PMI survey, this signals a solid monthly improvement in business conditions and one that was the most pronounced since January 2024.

“February data pointed to improved growth momentum in the Nigerian private sector. Rates of expansion in output, new orders, and purchasing activity all quickened as demand picked up and inflationary pressures showed signs of moderating,” it said.

The report disclosed that output was up in agriculture, manufacturing, services and wholesale & retail, although, in wholesale & retail, the rise was only fractional.

Read also: December PMI shows 51-point growth after two months contraction – CBN

It said new orders also increased at a marked pace, with the latest rise the most pronounced in just over a year. Customers were reportedly more willing to commit to new projects.

The report indicated that there are signs of increasing demand alongside easing inflationary pressures.

According to data from the National Bureau of Statistics, Nigeria’s inflation rate dropped to 24.48 percent in January after rebasing exercise.

Nigeria’s last inflation report before this one showed a surge in inflation rate to 34.80 percent in December 2024, up from 34.60 percent in November 2024. This represents a 0.20 percent increase month-on-month and a 5.87 percent increase year-on-year compared to December 2023. The inflation rate was driven by the festive period demand for goods and services in December

Authors of the PMI report said the pace of inflation remained elevated amid higher prices for raw materials and a rise in staff costs that was the sharpest since March 2024.

“In fact, cost pressures acted to limit the pace of job creation in February. Employment rose only marginally and at the slowest pace in three months, despite marked expansions,” they said.