Stanbic IBTC Bank Nigeria PMI®: New orders broadly secure at begin of 2026

Nigerian corporations confronted a muted begin to 2026. A broad stagnation of recent orders led to a lot slower rises in output and buying exercise. Extra positively, employment continued to extend at a broadly related tempo to that seen on the finish of 2025. In the meantime, quicker rises in buy costs and workers prices led corporations to extend their promoting expenses on the sharpest tempo in 4 months. 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. The headline PMI dipped to 49.7 in January, properly down from December’s studying of 53.5 and ticking under the 50.0 no-change mark. However, by posting near the impartial threshold, the newest determine signalled broadly secure enterprise circumstances initially of the 12 months.

Muyiwa Oni, Head of Fairness Analysis West Africa at Stanbic IBTC Bank commented: “After 13 months of consecutive studying above the 50 level no-change mark, Nigeria’s non-public sector exercise deteriorated to 49.7 factors in January from 53.5 in December. That is as new orders stagnated following a 14-month sequence of progress – seemingly linked to the weak demand that often happens within the begin of the 12 months after the festive-induced spending in December of the prior 12 months. Historic knowledge up to now six years additionally confirms this, the place headline PMI in January was decrease than December of the prior 12 months aside from January 2024. Certainly, the weak enterprise exercise was extra pronounced within the wholesale & retail which was deep under the 50-point progress threshold on a seasonally adjusted foundation, whereas agriculture, companies and manufacturing exercise witnessed progress within the interval as they had been all above 50.0 factors.

“Nonetheless, that is the primary time within the historical past of the PMI survey (since 2014) that January headline PMI will likely be under the 50-point psychological threshold, thereby seemingly signaling deeper points apart quiet exercise that often happens in January after festive-induced enhancements in December. Elsewhere, output costs elevated markedly to a four-month excessive in January, with the businesses linking this to greater buy prices. “Regardless of the destructive shock within the PMI numbers in January, we nonetheless see the Nigerian economic system rising by 4.1% y/y in 2026 as we anticipate demand to choose up in subsequent months after the lull seen in the beginning of the 12 months. Notably, the federal government has been seen in infrastructure, livestock growth, easing commerce constraints, and attracting investments in oil & fuel and manufacturing. Apart from that, the Dangote refinery is anticipated to proceed to have forward-linkage affect on different sectors of the economic system. Moreover, seemingly decrease rates of interest in keeping with decrease inflation and change charge stabilization ought to help non-public consumption and enterprise investments in 2026. Due to these components, we see extra sectors contributing to actual GDP progress charge in 2026 in comparison with 2025, seemingly translating to an enchancment within the high quality of lives of the residents in comparison with the final two years when the residents witnessed the total destructive affect of the federal government’s flagship reforms.”

The image illustrated by the headline index was in keeping with the information for output and new orders, each of which had been little modified in January. Whereas some corporations reported elevated buyer numbers, this was cancelled out by different corporations that talked about demand weak spot, that means that new orders stagnated following a 14-month sequence of progress. In flip, output rose solely marginally. In each circumstances, nonetheless, sector knowledge confirmed that weak spot initially of the 12 months was centred on wholesale & retail corporations. In the meantime, progress was recorded in agriculture, manufacturing and companies. Buying exercise and shares of inputs additionally elevated at a lot slower charges than in December, in keeping with a stagnation of recent orders. The speed of job creation was broadly in keeping with that seen within the earlier month, in the meantime, remaining slight. Staffing ranges have now elevated in every of the previous eight months.

A mix of rising employment and broadly secure new orders meant that corporations had been in a position to cut back their backlogs of labor for the primary time in three months, and to the most important diploma since March 2025. Buy costs elevated sharply in January amid widespread studies from panellists of upper uncooked materials prices. The tempo of inflation ticked as much as a three-month excessive. Workers prices additionally rose at a quicker tempo, and one which was essentially the most marked since July final 12 months. Respondents indicated that that they had raised wages so as to encourage staff and assist them with greater residing prices. The speed of output worth inflation quickened to a four-month excessive amid widespread studies of upper buy prices being handed via to prospects. That stated, the tempo of inflation remained among the many weakest because the COVID-19 pandemic. Enterprise sentiment dipped, however corporations remained assured that output will rise over the approaching 12 months. Optimism was linked to deliberate expansions, higher inventory holdings and hopes for greater new orders.