Nigeria’s private sector output hits 2022 high – Daily Trust

Nigeria’s private sector recorded its strongest output growth in more than four years in September, driven by a surge in new orders, improved customer demand and increased business activity, although rising fuel, raw material and labour costs continued to put pressure on companies.

The latest Purchasing Managers’ Index (PMI) report compiled by S&P Global for Stanbic IBTC Bank showed that the headline PMI rose for the second consecutive month to 56.4 points in September, from 54.3 points in August.

The latest reading, the highest since February 2022, indicated a significant improvement in overall private-sector business conditions and marked a stronger performance in the third quarter compared with the second quarter of 2026.

According to the report, the improvement was largely driven by the rapid increase in new orders, supported by stronger customer demand and the introduction of new products.

New business increased for the eighth consecutive month, recording its fastest expansion since February 2022. Consequently, business activity also grew at its sharpest pace in more than four years.

The expansion was broad-based, with all four sectors monitored by the survey recording growth in September.

To meet rising workloads, companies significantly increased their purchasing activities, with some businesses building up inventories in anticipation of further improvements in demand.

The resulting inventory accumulation was the highest since the end of 2021. Improved supplier performance also supported business operations, with vendors recording their third consecutive month of better delivery performance.

Employment increased during the month, although the pace of recruitment remained modest. Some companies relied on temporary workers to execute specific projects and manage rising workloads.

The additional capacity helped businesses keep up with new orders, resulting in a marginal decline in outstanding work for the second consecutive month.

However, the improvement in business activity came amid mounting inflationary pressures.

The report showed that purchase prices increased sharply in September, with input cost inflation reaching a three-month high. Businesses attributed the increase largely to higher fuel and transportation costs, alongside rising prices of animal feed, food products and other raw materials.

Staff costs also increased as employers adjusted wages to help workers cope with the rising cost of living and offered incentives to ensure timely completion of projects.

Consequently, businesses transferred some of the additional costs to customers through higher selling prices. Output price inflation accelerated to its fastest pace since June.

Commenting on the report, Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, said the September PMI reading indicated a significant improvement in business conditions and a stronger third-quarter performance relative to the second quarter.

He said the strong end to the quarter suggested that PMI readings were consistent with projected year-on-year GDP growth of 4.56 per cent in the third quarter of 2026.

Oni also projected that Nigeria’s full-year economic growth could reach approximately 4.4 per cent in 2026, compared with 3.87 per cent in 2025.

He expects the non-oil sector to perform better, with manufacturing recording the biggest improvement, supported by favourable base effects, while information and communications technology, trade, real estate, and finance and insurance are expected to drive services-sector growth.

Meanwhile, business confidence improved in September, with companies expressing optimism about the 12-month outlook. Respondents cited expansion plans, including opening new branches and exploring export opportunities.

The latest PMI performance suggests strengthening private-sector activity, although sustained growth will depend partly on whether businesses can manage rising production costs without undermining demand.