Private Sector Productivity Gains 52.0 On Sustained Growth In January

The productivity of the private sector of the Nigerian economy gained 52.0 in January 2025 as the sector sustained the nascent growth seen at the end of 2024

This was contained in the Stanbic IBTC’s Purchasing Managers Index report for January 2025.

The report said “the sector growth was sustained into the first month of 2025, with new orders and business activity each continuing to rise. Moreover, there was a large improvement in business confidence while firms expanded employment, purchasing and inventories.

“Although input costs and output prices continued to rise rapidly, respective rates of inflation were much slower than seen in December.”

The headline Purchasing Managers’ Index (PMI) posted 52.0 in January, down from 52.7 in December but still above the 50.0 no-change mark and therefore signalling a second successive monthly improvement in the health of the Nigerian private sector.

The report added that “business activity rose solidly in January, after having returned to growth in December. That said, the rate of expansion eased from the previous month. Activity increased across three of the four monitored sectors, the exception being wholesale & retail.”

It added that “there were signs of inflationary pressures softening in January. Although rates of increase in both input costs and output prices remained elevated, in both cases the rises were much weaker than seen in December. Overall input price inflation was the slowest since April 2024, while charges increased at the weakest pace in six months.”

Speaking, the head of Equity Research West Africa at Stanbic IBTC Bank,     Muyiwa Oni said, “Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024.

“We note an increase in both output and new orders, although slightly weaker than that seen at the end of 2024, on account of improving customer demand and more willingness to commit to new projects. Given the rising new orders, companies took on additional workers in January; representing the second month running in which this has been the case.”

He said “we expect a moderation in the inflation rate in 2025 although the pace of the moderation is only likely to be faster in late Q3, 2025. Notably, we expect headline inflation to average 30.5 per cent year-on-year in 2025 and end the year at 27.1 per cent Y-o-Y.

“In 2025, we project the non-oil sector to grow by 3.2 per cent Y-o-Y from an estimated 3.0 per cent Y-o-Y in 2024. Growth is likely to pick up across manufacturing and trade, while ICT and finance & insurance should continue to play a big role in economic performance.

“However, agriculture will likely still lag its long-term average amid lingering internal security challenges, high input costs, and extreme weather conditions. Within the manufacturing sector, cement, food and chemicals & pharmaceutical products are key sub-sectors that have been exceeding the manufacturing sector’s growth since Q4, 2022.”