Nigeria’s Business Activity Rises for Fourth Straight Month as Demand Soars

Business activity in Nigeria rose for the fourth straight time in March as inflationary pressures continue to ease, according to a new Purchasing Managers’ Index (PMI).

The latest monthly PMI by Stanbic IBTC Bank released on Tuesday showed the headline index rose to 54.3 in February 2025 from 52.0 in the previous month. Readings above 50.0 signal an improvement in business conditions, while those below show deterioration.

“The recovery in the Nigerian private sector gathered strength in March, with output, new orders and employment all increasing to greater degrees than in February. Firms were helped to some extent by softening inflationary pressures, with input costs increasing at the slowest pace since May 2023,” the index report said.

It said central to the latest strengthening in the health of the private sector was an improving demand climate which helped lead to a fifth successive monthly expansion of new orders in March.

“Moreover, the pace of increase was sharp and the fastest in 14 months. In turn, the pace of output growth also quickened at the end of the opening quarter. Here too, the latest rise was the sharpest since January 2024,” the report added.

The PMI index, which measures the performance of the private sector, is derived from a survey of 400 companies in the agriculture, manufacturing, services, construction, and retail sectors.

It is a composite index based on five individual indexes with the following weights: new orders (30 percent), output (25 percent), employment (20 percent), suppliers’ delivery times (15 percent), and stock of items purchased (10 percent), with the delivery times index inverted so that it moves in a comparable direction.

Output expanded across all four sectors covered by the report. Increases in new orders and output requirements encouraged companies to expand their staffing levels and purchasing activity accordingly.

According to Stanbic, a modest rise in employment was nonetheless the most marked in seven months, while input buying was up sharply.

“Although rates of expansion in output and new orders quickened in March, companies were less optimistic regarding the 12-month outlook for business activity,” it said. 

Authors of the report noted that confidence was at a three-month low and weaker than the series average. 

“Those firms that predicted a rise in output linked this to planned advertising, as well as business investment and the opening of new branches.”