Nigeria’s private sector returned to expansion in February after a brief contraction at the start of the year, as stronger demand and easing inflationary pressures helped lift output and new orders.
The Stanbic IBTC Bank Purchasing Managers’ Index rose to 53.2 in February from 49.7 in January, according to data compiled by S&P Global and endorsed by the National Bureau of Statistics. The report was released on Monday, March 2, 2026. The survey-based index is a diffusion measure where readings above 50 signal expansion from the previous month, while levels below 50 indicate contraction.
The latest figures show business conditions improved solidly during the month, reversing January’s decline and extending a broader recovery trend that has been in place since December 2024.
The rebound was driven primarily by a renewed increase in new orders, supported by improved customer demand and better product affordability, according to the report. Firms cited higher customer numbers and new product launches as factors underpinning the pick-up in activity.
Output rose at the fastest pace in four months, with all four monitored sectors recording growth. Wholesale and retail returned to expansion after contracting in January, signaling a broad-based recovery across the private economy.
The survey was conducted between Feb. 10 and Feb. 25, 2026, and drew responses from about 400 private-sector companies spanning agriculture, mining, manufacturing, construction, wholesale, retail and services.
Employment increased for a ninth consecutive month as companies responded to higher order volumes by raising staffing levels. Job creation accelerated to its fastest pace since October 2025.
Despite sustained hiring, backlogs of work rose at the quickest rate since May 2020. Companies attributed the build-up to delayed client payments, shortages of materials and staff, and persistent power supply challenges. The rise in outstanding business suggests capacity constraints remain even as demand strengthens.
Purchasing activity expanded markedly during the month as firms sought to rebuild inventories and meet higher order volumes. Stocks of inputs also increased.
Supplier delivery times shortened further, helped by prompt payments and improved traffic conditions, offering some operational relief to businesses grappling with logistical and infrastructure bottlenecks.
Inflationary pressures moderated sharply in February, aided by an appreciation of the naira. Purchase cost inflation slowed to its weakest level in just over six years, though some firms continued to report higher prices for animal feed and selected raw materials.
Staff costs continued to rise, partly reflecting cost-of-living adjustments. However, with overall input cost pressures easing, firms raised their output prices at the slowest pace since January 2020.
The naira’s relative strength played a central role in the easing price environment. The currency has traded below N1,400 per dollar since late January, supported by stronger external accounts, increased offshore foreign-exchange inflows and improved remittances. Interventions by the Central Bank also helped moderate currency movements.
Muyiwa Oni, Head of Equity Research for West Africa at Stanbic IBTC Bank, said stronger customer demand and competitive pricing contributed to renewed momentum in output and new orders during February. The moderation in inflationary pressures, he said, also provided some breathing space for businesses.
Even so, business confidence remains measured. Sentiment improved in February compared with January but stayed relatively subdued by historical standards.
Companies cited advertising initiatives and expansion plans as key drivers of optimism over the next 12 months. Planned investments in capacity and market reach are expected to support output if demand conditions remain favorable.
Stanbic IBTC projects Nigeria’s real gross domestic product will expand 3.86% year on year in the first quarter of 2026 and 4.1% for the full year. The bank expects growth to be supported by infrastructure spending, livestock development initiatives, easing trade constraints and fresh investment in oil and gas and manufacturing.
Forward linkages from the Dangote refinery are also expected to provide a lift to industrial activity and reduce import dependence, helping to stabilize external balances and reinforce currency strength.
The February PMI data suggest that, while structural constraints such as power supply and payment delays persist, underlying demand is recovering and price pressures are easing. For policymakers and investors, the combination of expanding output, moderating inflation and a firmer currency offers tentative evidence that macroeconomic stabilization efforts are gaining traction.
Whether the rebound can be sustained will depend on the durability of foreign-exchange inflows, continued policy support and the ability of firms to navigate infrastructure and liquidity constraints.
For now, the March 2 release of February’s PMI marks a return to expansion and signals that Nigeria’s private sector has regained momentum after January’s setback.