A pickup in demand is feeding through to production, with companies across the private sector stepping up activity in August as new orders reached their highest level in 12 months.
The Stanbic IBTC Bank Nigeria PMI rose to 54.3 points from 52.5 in July, according to data compiled by S&P Global, marking seven consecutive months of private-sector expansion.
The acceleration was driven principally by stronger inflows of new business, with companies reporting improved customer demand and the launch of new products. The increase in orders subsequently encouraged firms to step up output and business activity during the month.
The latest PMI reading adds to evidence of a recovery in economic activity following the stronger-than-expected second-quarter performance reported by the National Bureau of Statistics (NBS).
Nigeria’s real gross domestic product (GDP) expanded by 4.43 percent year-on-year in the second quarter of 2026, compared with 4.23 percent in the corresponding quarter of 2025. Agriculture and services remained key contributors, growing by 4.39 percent and 4.60 percent respectively, while the non-oil economy accelerated to 4.31 percent from 3.64 percent a year earlier.
The PMI data indicate that the momentum has carried into the third quarter, with output in the private sector increasing for the 21st consecutive month.
All four broad sectors monitored in the survey recorded expansion, with agriculture and manufacturing posting particularly strong increases. Improved availability of materials also helped companies raise production during the month.
Muyiwa Oni, head of equity research, West Africa, at Stanbic IBTC Bank, said the latest reading reflected stronger demand and an increase in business opportunities.
“Private sector activity in Nigeria was in an expansionary territory for the seventh consecutive month, rising to 54.3 points in August from 52.5 points recorded in July,” Oni said.
The improvement in new business also supported the labour market, extending the run of job creation to 15 consecutive months. However, employment growth remained modest relative to the sharper increases recorded in output and new orders.
Wholesale and retail businesses recorded a decline in employment, while staffing levels increased across the other sectors surveyed.
Beyond immediate demand conditions, businesses also expressed optimism about expanding their operations. Companies indicated plans to hire additional workers, enter new locations and increase exports, supported by expectations of higher customer numbers.
The stronger flow of business helped companies work through existing workloads, with backlogs declining for the first time in seven months.
Purchasing activity also accelerated significantly, reaching its fastest pace since November 2025, while inventory accumulation climbed to a nine-month high. The combination points to businesses preparing for sustained demand rather than simply responding to existing orders.
However, the strengthening activity came with renewed cost pressures.
Purchase price inflation accelerated during August, driven largely by higher fuel and transportation costs and increases in raw material prices. Staff cost inflation moved in the opposite direction, easing to its weakest level in nine months.
Rising input costs prompted businesses to increase selling prices, pushing output price inflation higher during the month. Agriculture recorded the sharpest increase in selling prices among the four sectors covered by the survey.
Oni said input prices continued to rise as transportation and raw material costs increased, while output prices also maintained an upward trajectory.
The pressure on costs means that the quality of the current expansion will depend not only on the growth in sales and production but also on the ability of companies to protect margins as operating expenses rise.
Meanwhile, supply-chain conditions improved further. Suppliers delivered goods faster for the second consecutive month, with companies attributing the improvement to prompt payments, stronger supplier relationships, greater competition among vendors and improved logistics.
Business confidence about output over the next 12 months remained positive, although it slipped to a three-month low. Companies nevertheless pointed to expansion into new locations, increased exports, higher employment and expectations of rising customer numbers as the main reasons for their optimism.
Oni said PMI readings so far in the third quarter continued to point to strong economic growth and could support a 4.1 percent full-year GDP growth rate.
He expects the non-oil sector to remain a key source of expansion, with manufacturing projected to receive the biggest boost among the three broad sectors of the economy.
