Nigeria’s economic activity strengthened further in July as a rebound in the services sector combined with sustained agricultural growth to drive a second consecutive month of expansion.
The latest Central Bank of Nigeria (CBN) Purchasing Managers’ Index (PMI) showed the Composite PMI rose to 51.1 points in July 2026, remaining above the 50-point threshold that separates expansion from contraction and indicating broader growth across the economy.
The latest reading reflects improving business activity, stronger demand and rising employment across key sectors, with 20 of the 32 subsectors covered by the survey reporting expansion during the month.
The recovery was largely driven by the return of the services sector to growth after three consecutive months of contraction, providing fresh momentum for economic activity and helping offset persistent weakness in manufacturing and other industrial activities.
The Services PMI climbed to 51.1 points in July from 49.4 points in June, reflecting renewed growth in business activity, employment and new orders.
Eight of the eleven services subsectors expanded during the month, led by Administrative and Support Services, while Transportation, Courier and Storage remained the weakest-performing segment.
The return of the services sector to expansion is significant given its dominant contribution to economic output and employment, suggesting that domestic demand and business confidence may be gradually recovering after several months of subdued activity.
Agriculture remained the strongest-performing sector, extending its uninterrupted expansion streak to 24 consecutive months.
The Agriculture PMI held steady at 52.1 points, supported by continued improvements in farming activities, new orders and employment.
Four of the five agricultural subsectors recorded expansion, with Agricultural Support Services posting the strongest performance, while Crop Production remained the only contracting segment.
The survey showed General Farming Activities registered 54.4 points, New Orders stood at 52.8 points, Employment reached 50.9 points, while Inventories remained positive at 50.5 points.
The sustained resilience of agriculture continues to provide an important buffer for the broader economy, particularly as policymakers seek to strengthen food production, rural incomes and non-oil growth.
Industrial activity, however, remained under pressure.
The Industry PMI improved marginally to 49.6 points from 49.5 points in June but remained below the expansion threshold, indicating that factory activity continued to contract, albeit at a slower pace.
Weakness in industrial production reflected declining output, softer new orders and lower raw material inventories, highlighting the continued challenges facing manufacturers amid elevated financing costs, energy constraints and infrastructure bottlenecks.
The Output Index stood at 49.2 points, while the Raw Materials Inventory Index declined to 48.2 points, both remaining in contraction territory.
However, some indicators suggested improving operating conditions.
Employment within the industrial sector remained above the expansion threshold at 50.5 points, while the Suppliers’ Delivery Time Index reached 51.3 points, indicating improved supply chain performance and faster delivery times.
Among the sixteen industrial subsectors surveyed, eight expanded while eight contracted.
Oil Refining recorded the sharpest contraction, while Electrical and Electronics emerged as the strongest-performing industrial subsector during the month.
Underlying business indicators also pointed to strengthening economic momentum.
The Composite Output Index rose to 51.8 points, while the Employment Index reached 51.1 points and the New Orders Index stood at 50.8 points, suggesting businesses experienced improving demand conditions and continued hiring during the month.
Although the Stock of Raw Materials Index remained below the neutral level at 49.6 points, the overall survey indicated improving production activity and stronger business sentiment.
The July survey also signalled easing cost pressures across the economy.
Both input and output price indices moderated on a month-on-month basis, suggesting businesses experienced a slower pace of cost increases even though inflationary pressures remained an important operational challenge.
While the renewed expansion in services and the continued resilience of agriculture provide encouraging signals for overall growth, the prolonged contraction in industrial activity indicates that stronger policy support will be needed to revive manufacturing and improve productive capacity.
The PMI survey, conducted between July 6 and July 10, covered 1,900 purchasing and supply executives across the industry, services and agriculture sectors.
Beginning from July 2026, the survey also adopted revised sectoral classifications aligned with the International Standard Industrial Classification of All Economic Activities (ISIC) while maintaining consistency with the National Bureau of Statistics’ economic activity classifications, a move expected to improve the comparability and quality of future business activity data.
