Nigeria’s private sector ends 2025 on strong growth, confidence

By : Abigail Ikhaghu

Date: 5 January 2026 1:21am WAT

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Stanbic IBTC Bank

Stanbic IBTC Bank

Nigeria’s private sector closed 2025 on a solid footing as stronger customer demand drove sharp increases in output and new orders, while business confidence climbed to a six-month high, the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) has said.

The PMI stood at 53.5 in December, marginally lower than 53.6 in November but firmly above the 50-point threshold that signals expansion. The reading marked the thirteenth consecutive month of improving business conditions and was broadly in line with the average for the year, reflecting sustained momentum across the economy.

Growth during the month was anchored on improved customer demand, which translated into a marked rise in new orders. The increase in sales extended a 14-month expansion streak and was only slightly weaker than in November. In response, firms raised output sharply, with all four broad sectors recording growth, led by agriculture.

Stronger demand also encouraged companies to step up purchasing activity and expand inventory holdings toward the end of the year. Employment levels rose as well, though job creation remained marginal and slowed to its weakest pace since June 2025.

Backlogs of work increased slightly for the second consecutive month, with firms attributing delays in project completion to material shortages and power supply challenges.

Supplier delivery times, however, improved, although to the least extent in six months, as some respondents linked faster deliveries to prompt payments and reduced traffic.

Inflationary pressures edged higher in December after easing to near five-year lows in November. Higher raw material prices pushed up input costs, while staff costs also rose as companies paid employees for additional work. Firms responded by increasing selling prices, with manufacturing recording the sharpest rise in charges among the monitored sectors. Despite the pickup, overall inflation remained among the weakest levels seen in the past six years.

Commenting on the data, the Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said the December reading showed resilience in business activity despite a slight moderation.

“Headline PMI at 53.5 moderated for the second consecutive month in December, although it remained in growth territory and broadly in line with the average for 2025 as a whole,” he said.

Oni explained that demand conditions remained supportive. “The continued expansion in business activity reflects higher customer demand, which supported a marked monthly increase in new orders. This, in turn, encouraged companies to expand their purchasing activity and inventory holdings,” he noted.

He added that sentiment strengthened significantly as firms looked ahead. “There was a marked improvement in business confidence as sentiment hit a six-month high, linked to planned investments in business expansions, including the opening of new branches and plans to boost product exports,” Oni said.

On prices, he observed that while input costs rose sharply from November’s lows, the pace was still below the 2025 average.

“Because of the higher input cost, selling prices also increased in December, with the most significant price increase seen in the manufacturing sector,” he said, adding that the festive period likely contributed to the month-on-month pickup in inflation.

According to the survey, close to 59 per cent of respondents expect growth in the period ahead, underpinning the rise in confidence. Planned investments in capacity expansion and branch openings featured prominently in firms’ outlook.

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