October 09, (THEWILL) — Nigeria’s private sector continued its steady recovery in September 2025, as the Stanbic IBTC Purchasing Managers’ Index (PMI) rose to 54.0, up from 53.7 in August, marking the 10th consecutive month of expansion. The sustained growth reflects improved business confidence, stronger domestic demand, and gradual stabilisation across key non-oil sectors.
The PMI, a key barometer of private sector health, measures changes in business conditions across output, new orders, employment, and inventories. A reading above 50.0 indicates expansion, while anything below signals contraction. Thus, September’s 54.0 points to continued momentum in economic activity despite persistent macroeconomic challenges.
Sectoral Breakdown:
Manufacturing: The manufacturing sector recorded modest gains, supported by increased new orders and improved raw material supply. Though production costs remain elevated due to exchange rate volatility and high energy prices, firms reported better input delivery times, allowing for a slight increase in output. However, weak consumer purchasing power continues to cap stronger growth in this segment.
Agriculture emerged as one of the strongest contributors to the PMI rise, buoyed by favourable rainfall patterns, improved logistics, and steady demand for food staples. Localised processing and shorter supply chains also helped sustain growth in agribusiness and rural employment — key anchors of Nigeria’s non-oil economy.
Services and Trade: The sectors — encompassing logistics, communications, retail, and professional services — remained the biggest growth drivers in September. Higher consumer activity, expanding e-commerce participation, and improved service delivery across urban centres underpinned both output growth and new business orders.
Factors Behind Growth
The September reading was largely driven by stronger demand conditions and renewed hiring activity, as firms responded to improved client orders and more predictable business environments. Respondents also noted a gradual easing in supply chain bottlenecks and a better outlook for raw material availability, particularly in the agricultural value chain.
Still, input cost inflation remains a key risk, with firms citing higher fuel prices, foreign exchange pressures, and transportation costs as major cost drivers. Many businesses, however, were able to pass some of these costs to consumers through marginal price adjustments — a trend that has so far not dampened demand.
Overall, September’s PMI reading reinforces confidence that Nigeria’s non-oil economy is showing resilience despite inflationary headwinds. As private firms continue to adjust to evolving economic realities, the momentum seen in services, agriculture, and manufacturing could lay a stronger foundation for Q4 growth.
If price stability and forex liquidity improve in the months ahead, analysts expect the PMI to remain comfortably above the 50-point threshold, signalling continued private sector expansion through the end of the year.
Ogochukwu Onwaeze
