Softening inflationary pressures, with input costs increasing at the slowest pace since May 2023 were instrumental to the recovery of the private sector for the month of March, 2024 as output, new orders and employment went up to 54.3 points.
Stanbic IBTC Bank Purchasing Managers’ Index (PMI) report for March 2025 revealed that PMI posted 54.3 in March, up from 53.7 in February and above the 50.0 no-change mark for the fourth consecutive month. Moreover, the latest improvement in business conditions in the private sector was solid and the most marked since the start of 2024.
It added that, “central to the latest strengthening in the health of the private sector was an improving demand climate.This helped lead to a fifth successive monthly expansion of new orders in March. Moreover, the pace of increase was sharp and the fastest in 14 months.
“In turn, the pace of output growth also quickened at the end of the opening quarter. Here too, the latest rise was the sharpest since January 2024. Output expanded across all four sectors covered by the report.”
The report also highlighted “increases in new orders and output requirements encouraged companies to expand their staffing levels and purchasing activity accordingly. A modest rise in employment was nonetheless the most marked in seven months, while input buying was up sharply.
“Higher purchasing activity fed through to rising stocks of inputs, with companies looking to build inventories in line with current and future business needs. Some firms also took advantage of softer price inflation to stockpile inputs.”
Speaking, the head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni said, softening inflationary pressures are helping to improve domestic demand conditions, in turn, supporting an overall improvement in private sector activity in Nigeria.
According to Oni, consequently, private sector activity strengthened for the fourth consecutive month, with the headline PMI settling higher at 54.3 points in March, its highest print since January 2024 (54.5 points).
Central to this improvement is an increase in customer requests, which ensured the rate of growth in new orders in March quickened to their fastest pace in 14 months,he said.
He noted that private sector activity in Q1, 2025 was at a much better position compared to the preceding quarter and this is consistent with a likely 3.9 per cent year-on-year growth in the non-oil sector in Q1:25, signifying a further improvement in business conditions.
“For the full year 2025, the non-oil sector is poised to improve further compared to 2024 as the lingering FX stability and improved FX liquidity conditions bode well for the real sector activities, including manufacturing, trade and real estate,” he stressed.
