Stanbic IBTC Bank Nigeria PMI®: Additional marked enlargement of enterprise exercise at finish of 2025

The Nigerian non-public sector remained in progress territory on the finish of 2025 as enhancements in buyer demand fed by to increased new orders, output and buying exercise. Employment additionally elevated, however the fee of job creation remained marginal. Inflationary pressures picked up modestly in December however remained usually near current lows. In the meantime, enterprise confidence improved sharply. The headline determine derived from the survey is the Stanbic IBTC Buying Managers’ Index™ (PMI®). Readings above 50.0 sign an enchancment in enterprise circumstances on the earlier month, whereas readings under 50.0 present a deterioration.

Muyiwa Oni, Head of Fairness Analysis West Africa at Stanbic IBTC Bank commented: “Headline PMI (53.5 vs November: 53.6) moderated for the second consecutive month in December, though nonetheless within the progress territory and the most recent studying is broadly according to the common for 2025 as a complete. The continued enlargement in enterprise exercise in December, albeit barely softer than November, displays increased buyer demand, which supported a marked month-to-month enhance in new orders. This in flip inspired firms to increase their buying exercise and stock holdings. In the meantime, there was a marked enchancment in enterprise confidence among the many firms as sentiment hit a six-month excessive, linked to deliberate investments in enterprise expansions, together with opening of recent branches and plans to spice up merchandise exports. Whereas total enter costs (64.4 vs November: 61.9) elevated sharply in December from the close to five-year low posted in November, the speed of inflation was weaker than the 2025 common. Due to this excessive enter price, promoting costs additionally elevated in December with essentially the most important value enhance seen. within the Manufacturing sector. The pickup in inflationary pressures in December could also be linked to the upper spending patterns related to the December festive interval. And so, inflation ought to enhance m/m and y/y in December, though the y/y enhance is more likely to be important on account of a low-base impact from the corresponding interval of the prior 12 months – an final result of the nation’s rebased CPI. Subsequently, we estimate inflation at 1.44% m/m which means a CPI of 132.34, and y/y headline inflation of 32.34% in December.

We now see the Nigerian economic system rising by 3.8% y/y in 2025 and 4.1% y/y in 2026. Each Manufacturing and Providers are more likely to see increased progress in 2025 in comparison with 2024 ranges, based mostly on the outcomes from the PMI surveys to this point this 12 months. Elsewhere, the federal government has been seen in infrastructure, livestock growth, easing commerce constraints, and attracting investments in oil & fuel and manufacturing. Except for that, the Dangote refinery is predicted to proceed to have forward-linkage affect on different sectors of the economic system.

Moreover, seemingly decrease rates of interest according to decrease inflation and trade fee stabilization ought to help non-public consumption and enterprise investments in 2026. Due to these elements, we see extra sectors contributing to actual GDP progress fee in 2026 in comparison with 2025, seemingly translating to an enchancment within the high quality of lives of the residents in comparison with 2025.”

The headline PMI posted 53.5 in December, little-changed from 53.6 in November and signalling a strong month-to-month enchancment in enterprise circumstances as 2025 drew to a detailed. The newest strengthening in working circumstances was the thirteenth in as many months, and broadly according to the common for 2025 as a complete. Development in December emanated from an enchancment in buyer demand which supported a marked month-to-month enhance in new orders. The rise in gross sales was the fourteenth in as many months and solely barely weaker than in November.

In flip, firms expanded output sharply, with the tempo of progress broadly according to that seen in November. All 4 broad classes noticed output rise, led by agriculture. Stronger buyer demand additionally inspired companies to increase their buying exercise and stock holdings. Employment was additionally up, however solely marginally and on the slowest tempo since June 2025. For the second month operating, firms famous a slight rise in backlogs of labor. Delays finishing initiatives have been reportedly attributable to materials shortages and energy provide points. In the meantime, suppliers’ supply instances shortened however to the least extent in six months amid experiences of poor street circumstances. These companies that registered shorter lead instances linked this to immediate funds and an absence of visitors. Increased uncooked materials costs led to a marked rise in buy prices. The tempo of inflation quickened however remained among the many weakest previously six years. Workers prices additionally elevated at a sooner tempo as companies paid staff for added work.

Corporations responded to increased enter prices by elevating their very own promoting costs in December. Right here too the tempo of inflation quickened, however was solely barely stronger than the current low posted in November. Manufacturing registered the sharpest rise in expenses of the 4 monitored classes. Nigerian private-sector companies have been rather more assured within the outlook for enterprise exercise on the finish of 2025. Sentiment jumped to a six-month excessive as near 59% of respondents predicted progress. Deliberate funding within the enlargement of operations and opening of recent branches was central to confidence.