Stanbic IBTC Bank’s Purchasing Managers’ Index (PMI) released by S&P Global on Monday indicated that Nigeria’s private sector activity improved to the best level in 9 months as of May this year
The report showed that the growth momentum in Nigeria’s private sector was stimulated by rises in output and new orders as private companies rampied up their purchasing power in the month under review
According to S&P, however., expansions in employment remained slow and on the price front, higher fuel costs continued to drive sharp increases in input costs and output prices while inflation rates softened from April.
The headline PMI rose to 54.1 in May from 52.4 in April, signalling a solid monthly improvement in business conditions, the highest recorded since August 2025.
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Similarly, the global ratings agency reported the private sector’s health also strengthened for four consecutive months, propelled by improvement in business conditions which accelerated expansions in both output and new orders during May.
The latest PMI in May showed that the rates of growth hit seven- and nine-month highs respectively as anecdotal evidence pointed to improving customer demand and the launch of new products, with output growth was recorded across all four broad sectors covered by the survey.
S&P further clarified that Improving demand, and the prospect of further growth in the months ahead, led companies to expand their purchasing activity and inventories in May.
It stated that efforts to secure inputs were aided by improved vendor performance, as prompt payments, goods arrangements with suppliers, and better road conditions helped speed up deliveries.
The report indicated that employment continued to rise only slightly midway through the second quarter, although sustained job creation had now been recorded in each month for a year.
Meanwhile, the report revealed that work backlogs increased for the fourth successive month amid customer payment delays, material shortages and power failures.
S&P noted that increasing fuel costs following the outbreak of war in the Middle East continued to drive up purchase prices in May as purchase costs rapidly rose, despite inflation easing to a three-month low.
This is even as it reported that purchase prices increased at a much quicker pace than staff costs, which rose modestly again in May, adding that where companies increased staff pay, it is often to help with higher living costs, particularly transportation costs.
The ratings agency reported that in line with the picture for input costs, output prices continued to rise sharply in the month under review, adding that, however, the rate of inflation eased to its lowest level since February.
It hinted that plans to increase advertising and expand operations through the opening of new branches and introduction of new products were behind optimism in the year-ahead outlook for output.
The latest report by the National Bureau of Statistics (NBS), reflected that the Nigerian economy grew by 3.89% y/y in Q1 2026, slightly below the estimate of a 3.99% y/y GDP growth rate for the quarter, as projected by the Stanbic IBTC Bank PMI, ostensibly as a result of lower-than-expected non-oil sector growth.
