Yemisi Izuora
The Stanbic IBTC has reported that growth was maintained in the Nigerian private sector during July as firms again signalled a marked increase in new orders during the month. In turn, output and employment also rose, albeit modestly, while inflationary pressures softened.
The headline figure derived from the survey is the Purchasing Managers’ Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
Stanbic IBTC Bank Nigeria PMI Index, sa, >50 = improvement m/m. Dots = long-run average since January 2014. 60 55 50 45 40 35 16 17 18 19 Data were collected 9-29 July 2026. 20 21 22 23 Sources: Stanbic IBTC Bank, S&P Global PMI. ©2026 S&P Global.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank commented: “Nigerian businesses reported improved customer demand in July while better pricing and new product launches also helped them to capture new orders arising from the increase in demand. These factors helped to keep the private sector activity in an expansionary territory, although this moderated when compared to June. Notably, the headline PMI settled at 52.5 points in July after the 53.4 points recorded in June, presenting the slowest since March 2026. Businesses also increased their input purchasing activity, linking this to efforts to keep up with current demand requirements and prepare for future workloads.
While input costs increased at their slowest pace in five months, panelists reported higher costs for fuel and raw materials. Selling prices also softened in line with the picture for input costs in July. Headline inflation eased slightly to 15.91% y/y in June from 15.93% y/y in May, snapping three consecutive months of price increases. Although July inflation is likely to be higher m/m, we expect inflation y/y to print lower, likely at 15.72% y/y primarily driven by favourable base effects from the corresponding period of last year, because we do not expect to see the magnitude of m/m inflation witnessed in July 2025 (1.99%) to materialize this year.
We retain our 2026 growth forecasts at 4.1% as we see the oil sector growing by 3.45% y/y in 2026, from 8.50% y/y in 2025, while the non-oil sector is likely to grow by 4.11% y/y, from 3.71% y/y in 2025. The risks to our outlook include country-wide insecurity which may constrain food production, exchange rate pressures resurfacing, extreme-weather related conditions and higher fertilizer prices impacting crop yield, and a volatile global environment which may affect sentiment and constrain capital flows.”
The headline PMI registered 52.5 in July, down from 53.4 in June but still above the 50.0 no-change mark and signalling Comment 24 25 26 a sixth successive monthly strengthening in the health of the private sector. The latest improvement in business conditions was solid, albeit the least pronounced in three months.
Companies signalled a further marked increase in new business in July, extending the current sequence of growth to six months. According to respondents, the launch of new products and competitive pricing had helped them to secure new orders, while general improvements in customer demand were also mentioned.
Improving demand conditions supported a further increase in business activity, albeit one that was only modest and the slowest since January. The agriculture and manufacturing sectors posted sharp rises in output, with growth more modest in the services and wholesale & retail categories. A modest increase in employment was also recorded in July as companies responded to higher output requirements. Here, the pace of growth eased to a three-month low.
As well as raising staffing levels, purchasing activity was also expanded as firms made efforts to keep on top of workloads. Planning for future output requirements was also a factor behind a further marked increase in input buying, with inventories up accordingly.
Despite efforts to expand capacity and keep on top of workloads, logistical issues in some cases prevented projects being completed on time and backlogs of work rose slightly again in July. Supplier performance did improve at the start of the third quarter, however, following a first lengthening of lead times in a year in the previous survey period. Inflationary pressures softened in July, with both input costs and output prices rising at weaker rates than in June. Purchase cost inflation slowed particularly sharply, easing to the lowest in five months. Purchase prices continued to rise at a marked pace, however, due to higher costs for fuel and raw materials. Meanwhile, staff costs increased modestly, and at the softest rate since April.
In line with the picture for purchase prices, Nigerian companies increased their own charges at the weakest pace since February. The agriculture sector posted the fastest rise in selling prices in July, with the slowest pace of inflation in services. Companies remained optimistic that output will rise over the coming year, with just under half of respondents expressing a positive outlook. Confidence reflected enhanced marketing strategies and planned business expansions such as the opening of new branches. Sentiment dipped from June’s one-year high, however.