The just-concluded month of February recorded improved growth momentum in the Nigerian private sector,, with rates of expansion in output, new orders and purchasing activity quickened, as demand picked up and inflationary pressures showed signs of moderating, the Stanbic IBTC Purchasing Managers’ Index  (PMI) has shown.

 

 

The report also indicates that, with costs continuing to rise sharply, some companies were reluctant to hire additional staff and employment increased only marginally.

 

 

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. The headline PMI rose to 53.7 in February from 52.0 in January, signalling a solid monthly improvement in business conditions, and one that was the most pronounced since January 2024.

 

 

Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni  noted that activities  in Nigeria’s private sector improved for the third consecutive month, with the latest PMI reading of 53.7 points in February at its highest level since January 2024 (54.5 points).

 

 

“A relatively stable exchange rate and moderation in fuel prices are supporting the ease in inflationary pressures, which in turn helped strengthen consumer demand in the month. Thus, new orders increased for the fourth consecutive month, with survey participants noting a greater desire on the part of customers to commit to new projects,” he stated.

 

 

Oni further explained that,  output also increased sharply in February as the output index settled at 56.9 points from 53.7 points in January, in line with the increase new orders, with input price inflation easing  further in February to its weakest level since April 2024.

 

 

However, about 39.0% of respondents, he added, increased their output prices in the month, with less than 1.0% lowering their charges.

 

“Nigeria’s real GDP growth improved further in Q4:24, rising by 3.84% y/y, from 3.46% y/y in Q3:24. Growth in Q4:24 was the highest since Q4:21 when this economy grew by 3.98% y/y in real terms. Q4:24 GDP now brings 2024 full-year growth to 3.40%, from 2.74% in 2023, supported by both the oil and the non-oil sectors. In terms of contributions to the overall GDP growth in Q4:24, Services continue to dominate with a 79.0% contribution to the country’s GDP growth (same as Q3:24), followed by Agriculture with an 11.9% contribution while Industries contributed the remaining 9.0% of the real GDP growth in the review quarter.

 

 

“The non-oil sector of the Nigerian economy is now poised to improve further in 2025 as the lingering FX stability and improved FX liquidity bodes well for the real sector activities, including manufacturing, trade and real estate. This, in addition to the anticipated reduction in borrowing costs should further support the growth of the non-oil sector in 2025,” he stated.

 

 

The report also projected  the non-oil sector to grow by 3.4% y/y in 2025, further raising the optimism of the nation’s  economy growing  by 3.5% y/y in real terms in 2025, with the Q1:25 growth print forecasted to settle at 3.55% y/y.

 

 

“The  health of the private sector has now strengthened in three consecutive months. Output increased for the third month running in February. Moreover, the latest expansion was sharp and the fastest since January 2024. Respondents linked the rise in activity to higher sales amid an improving demand environment,” the report stated.