Nigeria’s economy sustains expansion for second consecutive month-CBN
Onome Amuge
The Purchasing Managers’ Index (PMI) for Nigeria in January 2025 revealed a second consecutive month of economic expansion, as data from the Central Bank of Nigeria (CBN) showed a reading of 50.2 points for the month.
This uptick in the PMI reflects improvements in key sectors such as industry and agriculture, signalling a boost in economic activity within those industries. However, the services sector contracted during the month, dampening the overall positive trend observed in the data.
The PMI, which is widely regarded as a vital economic indicator, provides valuable insights into the trajectory of business activities by aggregating responses from businesses across various sectors.
A PMI reading above 50.0 points indicates a positive trend in business operations, implying an expansion in economic activities. Conversely, a reading below 50.0 points signals contraction within the economy. An index value of exactly 50.0 points indicates no significant change in economic conditions.
The January 2025 Nigeria PMI readings showed expansion in the composite output (50.9 points), new orders (50.2 points), and employment levels (50.2 points), indicating overall economic growth; however, the composite stock of raw materials (49.8 points) and suppliers’ delivery times (49.6 points) reflected a decrease and a further slowdown, respectively, suggesting challenges in supply chain management.
The review of 36 sub-sectors spanning the industry, services, and agriculture sectors uncovered that 17 sub-sectors registered economic growth, led by the transportation equipment sub-sector, which experienced the most significant expansion.
Conversely, 17 sub-sectors experienced a decline in economic activities, with the forestry sub-sector recording the sharpest contraction, while two sub-sectors remained stable without any discernible change in performance.
The PMI for Nigeria’s industry sector disclosed that among the 17 sub-sectors surveyed, 10 demonstrated growth, six experienced contractions, and the plastic and rubber products sub-sector remained unchanged.
The transportation equipment sub-sector recorded the highest level of growth among all industry sub-sectors, while the Non-metallic mineral products sub-sector experienced the steepest contraction.
These opposing trends within the industry sector were ultimately balanced out, with the overall industry sector index settling at 51.3 points, confirming that the sector experienced an expansion in activities for January 2025.
A more detailed analysis of Nigeria’s industry sector revealed that output and employment levels expanded during January 2025, with respective readings of 54.0 and 52.4 points.
However, the new orders and stock of raw materials sub-indices contracted to 49.6 points each, demonstrating weaknesses in demand and supply.
Furthermore, suppliers’ delivery times remained slow, with an index value of 49.6, signaling continued bottlenecks in the supply chain.
The services sector in Nigeria experienced a contraction in January 2025, as indicated by the sector’s PMI, which fell to 48.6 points.
Out of the 14 sub-sectors assessed, only three registered expansions, with motion pictures, cinema, sound recording, and music production exhibiting the most notable growth.
Conversely, 10 sub-sectors in the services sector experienced contractions, with transportation and warehousing leading the decline.
Further analysis of the services sector performance in January 2025 uncovered declines across key sub-indices, with output, new orders, stock of raw materials, and employment levels registering respective readings of 48.8, 48.6, 48.6, and 48.4 points.
In contrast to the contraction in the services sector, Nigeria’s agriculture sector maintained its upward momentum in January 2025, with an overall PMI of 52.5 points, reflecting expansion in the sector.
Four out of the five sub-sectors surveyed exhibited growth, with crop production leading the pack, while forestry was the only sector that experienced a decline.
Within Nigeria’s agriculture sector, output, new orders, employment, and stock of raw materials all experienced growth in January 2025, with the respective sub-indices registering values of 51.8, 54.3, 51.3, and 52.4 points, respectively.