Nigeria’s private sector rebounded into expansion in February, as the Purchasing Managers’ Index (PMI) compiled by S&P Global for Stanbic IBTC Bank rose to 53.2 from 49.7 in January, signalling a renewed improvement in business conditions after a brief contraction at the start of the year.
The latest PMI reading, released on Monday and endorsed by the National Bureau of Statistics (NBS), showed a solid monthly recovery in the health of the private sector.
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Readings above the 50.0 threshold indicate improvement compared to the previous month, while those below signal deterioration.
According to the report, the headline PMI recovered sharply in February after dipping below the no-change mark in January.
“As such, the latest data pointed to a solid monthly improvement in the health of the private sector. Except for January’s blip, business conditions have improved continuously since December 2024,” the report stated.
The rebound was driven largely by a renewed increase in new orders, supported by stronger customer demand and improved product affordability. Surveyed firms cited higher customer numbers and the introduction of new product offerings, leading to output growth at the fastest pace in four months.
All four monitored sectors recorded expansion during the month, with wholesale and retail returning to growth after contracting in January.
Employment rose for the ninth consecutive month, with staffing levels increasing at the quickest pace since October 2025.
Despite sustained hiring, backlogs of work climbed at the fastest rate since May 2020, reflecting delayed client payments, shortages of staff and materials, and persistent power supply challenges.
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Firms responded to rising order volumes by sharply increasing purchasing activity and inventory holdings. Suppliers’ delivery times improved further, aided by prompt payments and better traffic conditions.
Commenting on the data, Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, said stronger customer demand supported higher new product offerings at competitive pricing, allowing output and new orders to regain momentum in February.
An appreciation of the naira also contributed to a marked easing of inflationary pressures. Purchase cost inflation slowed to its weakest level in just over six years, although some firms continued to report higher prices for animal feed and raw materials.
Staff costs remained elevated, partly due to cost-of-living payments.
However, with overall input cost pressures moderating, firms raised output prices at the slowest pace since January 2020.
The report linked the softer price environment to the naira trading below N1,400 per dollar since late January, supported by stronger external accounts, higher offshore foreign exchange inflows, improved remittances and interventions by the Central Bank aimed at moderating currency appreciation.
Looking ahead, business sentiment improved in February, though it remained relatively subdued. Advertising campaigns and expansion plans were cited as key drivers of optimism over the next 12 months.
Stanbic IBTC projects Nigeria’s real GDP to grow by 3.86 per cent year-on-year in the first quarter of 2026 and 4.1 per cent for the full year.
Growth is expected to be supported by infrastructure spending, livestock development, easing trade constraints, increased investment in oil and gas and manufacturing, as well as forward linkages from the Dangote Refinery.
The survey data were collected between February 10 and 25, 2026, based on responses from about 400 private sector firms across agriculture, mining, manufacturing, construction, wholesale, retail and services.
