Nigeria’s private sector recorded its strongest improvement in business conditions in 29 months in August 2026, as stronger customer demand, rising new orders and increased output lifted the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) to 54.3 points.
The latest PMI report, published on Tuesday, showed an increase from 52.5 points in July. The August reading was the joint-highest in just over two-and-a-half years, matching the level recorded in March 2025.
It also extended the expansion in business conditions to seven consecutive months. A PMI reading above 50 indicates an improvement from the preceding month, while a reading below 50 signals deterioration.
The survey, compiled by S&P Global and endorsed and adopted by the National Bureau of Statistics (NBS), was based on data collected between August 12 and 26.
New orders provided the biggest boost to August’s performance, increasing at their fastest pace since the beginning of 2024. Companies linked the stronger demand to improved customer interest and the launch of new products, while better availability of materials helped firms respond by increasing business activity at a much faster pace than in July.
Output also maintained its long-running growth streak, expanding for the 21st consecutive month. All four sectors covered by the survey recorded higher output, with agriculture and manufacturing posting particularly strong increases.
The rise in demand prompted companies to increase their purchasing activity at the fastest rate since November 2025. Inventory accumulation also reached a nine-month high as firms prepared to meet business requirements.
Employment increased for the 15th consecutive month, although hiring remained modest compared with the growth recorded in orders and output. Wholesale and retail businesses reduced their workforce, while employment increased in the other sectors surveyed.
At the same time, companies reduced their backlogs of unfinished work for the first time in seven months, indicating that firms were able to work through outstanding orders despite the stronger inflow of new business.
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, said the August result reflected continued expansion across Nigeria’s private sector.
“Private sector activity in Nigeria was in an expansionary territory for the seventh consecutive month, rising to 54.3 points in August from 52.5 points recorded in July,” Oni said.
Businesses remained positive about their prospects over the coming year, with plans to recruit workers, enter new locations, increase exports and attract more customers. However, overall confidence about future output fell to a three-month low.
The stronger activity was accompanied by higher input costs. Purchase cost inflation accelerated in August as businesses faced increases in fuel, transportation and raw-material prices, although the rate remained below its 2026 average.
Staff cost inflation eased to a nine-month low, but companies still passed part of their higher expenses on to customers, pushing selling price inflation higher. Agriculture recorded the fastest increase in charges among the sectors covered by the survey.
Oni also pointed to renewed pressure from food prices. Food inflation rose to 20.31% year-on-year in July from 17.52% in June, even as headline inflation declined from 15.91% to 15.43%.
Stanbic IBTC said PMI readings recorded so far in the third quarter point to stronger economic activity and could support GDP growth of 4.1% in 2026.
The bank expects the non-oil sector to grow by 4.11% this year, compared with 3.71% in 2025, while oil-sector growth is projected to slow to 3.45% from 8.50%.
Manufacturing is expected to receive the strongest growth boost, partly because of a low statistical base in 2025. ICT, trade, real estate, finance and insurance are expected to remain major contributors to services-sector growth.
The PMI figures come shortly after the National Bureau of Statistics reported that Nigeria’s GDP grew by 4.43% year-on-year in real terms in the second quarter of 2026, compared with 4.23% in Q2 2025.
The 4.43% growth represents a 0.20 percentage-point improvement from a year earlier, with agriculture and services providing stronger support to the economy. Industrial-sector growth, however, slowed significantly compared with the same period in 2025.
The August PMI therefore points to a Nigerian business environment that is gaining strength, with rising orders and sustained output growth supporting activity even as companies continue to navigate higher operating and food costs.
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