Private Sector Growth Accelerates as Purchasing Managers’ Index Rises to 53.2
Nigeria’s private sector has returned to expansion territory, signaling a rebound in economic productivity as the Purchasing Managers’ Index (PMI) climbed to 53.2 in February 2026, according to the latest survey compiled by S&P Global Market Intelligence and Stanbic IBTC Bank. The improvement marks a recovery from the 49.7 reading recorded in January, which briefly indicated a contraction in business conditions.
The rise above the 50- point threshold, which separates expansion from contraction, reflects renewed growth in economic activity across Nigeria’s private sector. Analysts say the rebound was driven by stronger customer demand, improved affordability of products, and easing inflationary pressures.
The data offers a cautiously optimistic outlook for Nigeria’s economic trajectory in 2026, especially after months of macroeconomic adjustments including currency reforms, fiscal tightening, and inflation management policies.
Understanding the PMI Indicator
The Purchasing Managers’ Index (PMI) is a widely used economic indicator that measures business activity in the private sector. The index is derived from monthly surveys of purchasing managers across industries such as manufacturing, agriculture, services, construction, wholesale, and retail.
The index is calculated using five major components:
- New orders (30%)
- Output (25%)
- Employment (20%)
- Supplier delivery times (15%)
- Stock of purchases (10%)
A reading above 50 indicates expansion, while a figure below 50 signals contraction.
February’s reading of 53.2 therefore suggests a solid improvement in overall business conditions and economic productivity.
Private Sector Activity Returns to Growth
After dipping into contraction territory at the beginning of the year, Nigeria’s private sector rebounded strongly in February.
According to the PMI survey, new orders and output both rose sharply, marking the fastest pace of expansion in four months. Firms attributed the improvement largely to increased customer traffic, better pricing strategies, and expanded product offerings.
The output index climbed to 55.8, up from 50.2 in January, while new orders increased to 55.5 from 49.9, highlighting a strong revival in demand across sectors.
Industry data also showed that all four major sectors covered by the survey recorded growth during the month:
- Manufacturing
- Services
- Agriculture
- Wholesale and retail trade
The wholesale and retail sector, which had experienced a slowdown earlier in the year, returned to expansion and contributed significantly to the broader economic recovery.
Employment Expands for Ninth Consecutive Month
The improved business environment also translated into stronger labour market conditions.
Companies increased hiring in February to handle rising workloads and customer demand, marking the ninth consecutive month of employment growth in Nigeria’s private sector.
The pace of job creation reached its fastest level since October 2025, according to the survey.
Analysts say this sustained hiring momentum could gradually support household income levels and consumer spending if the trend continues through the year.
Inflationary Pressures Ease Significantly
Another major highlight of the PMI report was the sharp easing of inflationary pressures, which fell to their lowest level in more than six years.
The moderation in price pressures was largely attributed to:
- A stronger naira exchange rate
- Slower increases in input costs
- Reduced pressure on selling prices
With input costs rising more slowly, businesses also reduced the pace at which they increased product prices, helping improve affordability for consumers.
Economists note that stabilizing prices could support consumer demand and sustain the recovery in economic activity.
Currency Stability Supports Business Confidence
The strengthening of Nigeria’s currency played a key role in improving the operating environment for companies.
According to analysts at Stanbic IBTC, the relative stability of the naira helped ease the cost of imported raw materials and inputs, which had previously contributed to inflationary pressure on businesses.
As input prices stabilized, firms were able to moderate selling prices while maintaining output growth.
Challenges Still Persist
Despite the positive momentum, the PMI survey highlighted several challenges still facing Nigerian businesses.
These include:
- Payment delays
- Power supply constraints
- Raw material shortages
- Logistics disruptions
These factors contributed to a build-up in backlogs of work, indicating that demand is rising faster than companies’ capacity to fulfil orders in some sectors.
Business confidence also remains cautious, as companies continue to monitor macroeconomic developments and policy reforms.
Outlook for Nigeria’s Economy
Economic analysts remain cautiously optimistic about Nigeria’s growth outlook for 2026.
Stanbic IBTC projects that Nigeria’s real GDP could grow by about 3.86% in the first quarter of 2026 and around 4.1% for the full year, supported by infrastructure investment, improvements in trade conditions, and increased activity in the oil and gas sector.
Large industrial projects such as refinery expansion, energy investments, and manufacturing growth are also expected to contribute to broader economic momentum.
If the current trend continues, Nigeria’s private sector could sustain expansion through the year, reinforcing broader macroeconomic recovery.
Conclusion
The rise in Nigeria’s PMI to 53.2 in February 2026 signals a meaningful rebound in economic productivity after a brief contraction at the start of the year. Stronger consumer demand, easing inflation, and currency stability have combined to support renewed growth across key sectors of the economy.
While structural challenges remain, the latest data indicates that Nigeria’s private sector is gradually regaining momentum. Continued macroeconomic stability, improved infrastructure, and sustained policy reforms will be critical to ensuring that this recovery translates into long-term economic growth.
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