Nigeria's private sector maintained its growth trajectory in June 2026, marking the fifth consecutive month of expansion. This sustained activity was primarily driven by stronger customer demand and the introduction of new product offerings.
According to the latest Stanbic IBTC Purchasing Managers’ Index (PMI), the index eased slightly to 53.4 in June from 54.1 in May. Despite this moderation, the PMI remained comfortably above the 50.0 threshold, which separates expansion from contraction, indicating continued improvement in business conditions at the close of the second quarter.
The report attributed the expansion to rising customer demand, increased new orders, and ongoing business growth, although the pace of improvement was slower compared to the previous month. Improving demand supported further increases in output, new orders, and employment across most sectors of the economy.
Business activity expanded across three of the four sectors surveyed, with manufacturing being the only sector to record a contraction. Firms also increased staffing levels for the 13th consecutive month, while purchasing activity and inventories rose in anticipation of higher workloads and future growth.
Business confidence strengthened to its highest level since June 2025, buoyed by expansion plans, advertising efforts, and improved inventory positions.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented on the report, noting that the latest PMI suggests Nigeria’s economy maintained positive momentum during the second quarter despite a moderation in the pace of expansion. He stated, “Although the rate of growth slowed in June compared to May, Nigeria’s private sector witnessed an increase in output at the end of Q2 2026 as higher demand and new product development supported an increase in sales volume for companies.”
Oni added, “This rising demand led to higher workload, thereby ensuring the private sector hired new staff across three of the four sectors monitored by the survey besides agriculture.” He further highlighted, “The PMI print during the quarter is consistent with a likely 3.94% year-on-year GDP growth in Q2 2026, higher than the 3.89% recorded in Q1 2026.”
Stanbic IBTC retains its 2026 GDP growth forecast at 4.1%, though risks persist from insecurity, exchange rate pressures, adverse weather conditions, higher fertiliser prices, and a volatile global environment. Oni also mentioned that while input costs continued to rise due to higher fuel, transportation, and raw material prices, inflationary pressures were less severe than those experienced during the onset of the recent Middle East conflict.
Firms continued to expand operations despite persistent cost pressures and supply chain challenges. Purchasing activity remained strong, matching May’s pace, while inventories increased as businesses prepared for higher demand.
Backlogs of work continued to rise, reflecting customer payment delays, electricity supply challenges, and longer supplier delivery times caused largely by poor road conditions. Input costs increased sharply due to higher fuel, transportation, and raw material prices, although purchase price inflation eased to a four-month low. Selling prices also increased as businesses passed part of the higher operating costs on to customers.
Despite the moderation in output growth, firms remained optimistic about business prospects over the next 12 months, with confidence reaching its highest level in a year.
The Stanbic IBTC Purchasing Managers’ Index (PMI) is a key indicator of business activity in Nigeria’s non-oil economy. A PMI reading above 50.0 indicates improving business conditions compared to the previous month, while a reading below 50.0 signals a contraction.
Stanbic IBTC expects Nigeria’s economy to expand by 4.1% in 2026, with non-oil activities projected to remain the primary driver of growth despite risks from insecurity, exchange rate volatility, and global economic uncertainty.
