Stanbic IBTC Bank Nigeria PMI: Output progress slows however enterprise confidence rises sharply

The Nigerian personal sector remained in progress territory as the primary half of 2025 drew to an in depth, and enterprise confidence improved markedly in June. That stated, charges of growth in output, new orders and buying eased from Could. Though charges of inflation remained comparatively sharp, there have been additional indicators of price pressures softening and firms raised their output costs on the slowest tempo in simply over two years. The headline determine derived from the survey is the Stanbic IBTC Buying Managers’ Index (PMI®). Readings above 50.0 sign an enchancment in enterprise circumstances on the earlier month, whereas readings under 50.0 present a deterioration.

The headline PMI remained above the 50.0 no-change mark for the seventh consecutive month in June. That stated, at 51.6, the studying was down from 52.7 in Could and the bottom within the present progress sequence. The PMI signalled a modest enchancment in enterprise circumstances within the personal sector. The speed of output progress eased notably sharply, slowing for the second month operating to a seven month low. Sector information indicated that the slowdown within the tempo of growth mirrored a fall in manufacturing manufacturing as exercise continued to rise elsewhere. The place output rose, respondents linked this to greater new orders and the securing of latest prospects. Certainly, new enterprise elevated solidly in June, albeit right here too the tempo of growth slowed and was at a five-month low. Whereas the tempo of output progress eased in June, corporations have been way more optimistic concerning the outlook for the approaching 12 months.

Muyiwa Oni, Head of Fairness Analysis West Africa at Stanbic IBTC Bank commented: “Enterprise circumstances stay within the expansionary territory for the seventh consecutive month in June, however the tempo of growth slowed for the third consecutive month after peaking in March. Particularly, the headline PMI settled decrease at 51.6 factors in June from 52.7 factors in Could – under this 12 months’s common PMI print of 53.1 factors. Some corporations famous muted demand circumstances in June, whereas others witnessed greater exercise linked to securing new prospects and higher new orders. Nonetheless, Optimism within the 12-month outlook for output surged greater to 83.9 factors in June from 70.9 in Could – the best degree since August 2022 (85.8 factors) and shifting a lot nearer to the collection common (89.4 factors) after a interval of traditionally subdued expectations. Survey individuals linked this confidence to hopes that enough funding could be out there to spend money on bettering and increasing operations. Elsewhere, output value inflation slowed for the second month operating in June and was the weakest since Could 2023. Nonetheless, promoting costs continued to rise sharply as corporations handed on greater enter prices to prospects.

Manufacturing posted the quickest enhance in output costs of the 4 broad sectors coated by the report. The employment degree was broadly secure in June as corporations that took on further workers typically did so to attempt to carry on high of workloads. That stated, muted demand and value pressures discouraged different corporations from hiring. Insights from the month-to-month PMIs and crude oil manufacturing information from the Nigerian Upstream Petroleum Regulatory Fee (NUPRC) suggests an economic system that grew by an estimated 3.7% y/y in H1:25 supported by greater crude oil manufacturing and progress enchancment throughout Manufacturing and Providers, whereas Agriculture continues to lag its long-term common progress price of three.6%. Provided that inflation is anticipated to stay softer in comparison with the 2024 common, rates of interest are more likely to be decrease this 12 months and subsequent – we anticipate 150/200 bps price reduce in 2025 and 200/250 bps price reduce in 2026. These, along with structural reforms, elimination of earlier protectionist insurance policies, and subsiding influence of the federal government’s flagship reforms ought to assist to assist the medium time period {economic} progress path. Subsequently, we nonetheless preserve our expectation that the Nigerian economic system is more likely to develop by 3.5% y/y in actual phrases in 2025, however post-GDP rebasing might amplify this progress to 4.2% y/y.”

Sentiment improved to the best since August 2022 and moved nearer to the collection common after a interval of comparatively weak optimism. These respondents that predicted an increase in exercise over the following 12 months linked this to deliberate funding in bettering and increasing operations. Staffing ranges have been stored broadly secure in June following a marginal discount in Could. In the meantime, buying exercise continued to rise, however as was the case with output the tempo of growth slowed. This fed via to a weaker rise in inventories, which elevated on the slowest tempo within the present seven month sequence of accumulation. Backlogs of labor elevated for the third consecutive month, and at a modest tempo that was broadly consistent with that seen in Could.

Panellists linked greater excellent enterprise to shortages of supplies, delayed funds from prospects and energy provide points. Suppliers’ supply occasions have been broadly unchanged in June, ending a interval of shorter lead occasions stretching again to March 2023. Some corporations famous that poor highway circumstances had induced delays. Buy prices elevated sharply in June, however the tempo of inflation eased to a 25-month low. However, workers prices elevated at a sooner tempo. With total enter value inflation slowing, corporations additionally raised their output expenses at a weaker price, the softest since Could 2023.