The Nigerian private sector continued to grow at the end of 2025, driven by rising customer demand, according to the latest Purchasing Managers’ Index (PMI) report. Higher new orders, output, and purchasing activity were recorded, while employment saw modest gains. Inflationary pressures picked up slightly in December but remained close to recent lows, and business confidence strengthened significantly.

The PMI, which measures monthly business conditions, stood at 53.5 in December, virtually unchanged from 53.6 in November. Readings above 50 indicate expansion, while readings below 50 signal contraction. December marked the thirteenth consecutive month of improved business conditions, in line with the average performance for 2025.

Growth in December was primarily driven by stronger customer demand, which supported a significant rise in new orders—the fourteenth consecutive monthly increase. In response, companies expanded output sharply, led by the agriculture sector, and increased purchasing activity and inventory holdings. Employment grew marginally, marking the slowest pace since June 2025.

The report noted that backlogs of work rose slightly for the second consecutive month, largely due to material shortages and power supply challenges. Supplier delivery times shortened, though only modestly, with poor road conditions affecting logistics in some regions. Rising raw material costs led to higher purchase costs, while staff expenses also increased as firms compensated employees for extra work.

Companies responded to rising input costs by raising selling prices, with manufacturing reporting the steepest increases. Despite these pressures, private-sector firms showed strong confidence in business prospects, supported by planned investments, branch expansions, and export growth initiatives.

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented:
“Headline PMI (53.5 vs November: 53.6) remained in growth territory, reflecting higher customer demand that encouraged increased new orders, inventory, and purchasing activity. Business confidence also improved sharply, reaching a six-month high, linked to planned investments and expansion strategies.”