Nigeria’s PMI expands as agric, industry drive business growth
Omeiza Bilal with agency
Nigeria’s private sector recorded a fifth consecutive month of expansion in October 2026, but rising input and output prices are raising concerns about the sustainability of the recovery and its impact on businesses.
The Central Bank of Nigeria’s (CBN) latest Purchasing Managers’ Index (PMI) report showed that the composite index edged up to 53.2 points in October from 53.0 points in September, indicating continued improvement in business activities.
Although the marginal increase signals resilience in the economy, the accompanying rise in business costs suggests that companies are still struggling with inflationary pressures despite improving production and employment.
The composite output index increased to 54.6 points from 53.9 points, while the employment index rose to 53.2 points from 51.5 points, indicating stronger production and recruitment activities.
However, new orders moderated to 52.8 points from 53.7 points, while raw materials inventory declined slightly to 51.9 points from 52.1 points.
Agriculture maintained its position as the strongest-performing sector, extending its expansion streak to 27 consecutive months. All five agricultural sub sectors recorded growth, with livestock leading at 56.4 points.
Industry also recorded its third consecutive month of expansion, with 12 of the 16 subsectors surveyed growing. Cement manufacturing led industrial performance at 60.2 points, while chemical and pharmaceutical products contracted at 43.4 points.
In services, seven of the 11 sub sectors expanded, with educational services recording the strongest performance at 60.2 points. Arts, entertainment and recreation remained in contraction at 47.1 points.
The expansion was also reflected in the composite subsector figures, with 24 of the 32 subsectors surveyed recording growth, compared with eight that contracted.
However, the improvement came alongside renewed cost pressures. The composite input price index increased to 64.0 points from 63.3 points, while the output price index rose to 58.9 points from 58.4 points.
Agriculture recorded the strongest price pressure, with its input price index climbing to 68.3 points from 65.8 points and output prices rising to 61.1 points from 58.5 points.
Commenting on the broader October business conditions, Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, identified rising fuel and transportation costs as major factors pushing up operating expenses for Nigerian businesses.
Oni noted that higher fuel costs were feeding into production expenses, while increases in building materials and food prices were adding to the financial burden on companies.
He also observed that businesses were raising selling prices to accommodate higher costs, although increased staff expenses remained relatively modest.
According to Oni, improved customer demand, exchange rate stability and moderation in consumer prices could support business planning and economic growth.
Stanbic IBTC projected Nigeria’s economy to grow by 4.27 per cent in 2026 and 4.65 per cent in 2027, with agriculture and manufacturing expected to record significant improvements.
Economist Eugene Nizeyimana, Partner and Chief Executive Officer of SSCG Consulting, has also highlighted the gap between improving business activity and household economic conditions.
His assessment of recent economic indicators suggests that expanding business activity has yet to translate into stronger consumer purchasing power, with taxation, insecurity and high interest rates continuing to constrain businesses.
