Holiday Season Demand Drives Business Activity To 13-Month High

Nigeria’s private sector ended 2025 firmly in growth territory as the festive season demand boosted business activity to a 13-month high, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI).

The headline PMI stood at 53.5 in December, marginally lower than the 53.6 recorded in November but firmly above the 50.0 threshold that separates expansion from contraction.

The survey disclosed that the reading signalled a monthly improvement in business conditions and marked the thirteenth consecutive month of growth, broadly in line with the average performance recorded throughout 2025.

“The December expansion was driven largely by stronger customer demand, which translated into a marked increase in new orders. Sales growth extended to a fourteenth straight month, easing only slightly from November’s pace,” it said.

In response to rising workloads, companies expanded output sharply, with growth broadly matching that seen in the previous month. All four broad sectors covered by the survey recorded higher output levels, with agriculture leading the expansion.

It said improved demand conditions also encouraged firms to step up purchasing activity and increase inventory holdings. Employment rose again in December, although the rate of job creation was marginal and the weakest recorded since June 2025.

The survey added that business confidence improved sharply at the end of the year, reaching a six-month high. Nearly 59 per cent of survey respondents expressed optimism about future activity, underpinned by plans to invest in expanding operations, opening new branches, and boosting export capacity.

Head of equity research, West Africa, Stanbic IBTC Bank, Muyiwa Oni, said the December PMI reading moderated for the second consecutive month, although it was still in the growth territory and broadly in line with the average for 2025 as a whole.

He noted that continued expansion reflected stronger customer demand, which supported growth in new orders and encouraged firms to increase purchasing activity and inventory levels.

Oni added that while input prices rose sharply in December from a near five-year low in November, inflation remained weaker than the 2025 average.

He attributed the pickup partly to higher festive-season spending and projected monthly inflation of 1.44 percent in December, implying a headline inflation rate of 32.34 per cent year-on-year.

Looking ahead, Stanbic IBTC expects Nigeria’s economy to grow by 3.8 per cent year-on-year in 2025 and accelerate to 4.1 per cent in 2026, supported by stronger manufacturing and services activity, infrastructure development, improved trade conditions, and the forward-linkage impact of the Dangote refinery.

“Lower interest rates, exchange rate stabilisation and broader sectoral contributions are expected to further support private consumption, investment, and overall economic growth in 2026,” he said.