In February 2025, Nigeria’s PMI rose to 53.7, signaling the fastest productivity growth in 14 months. This increase reflects improved business conditions, with notable rises in output, new orders, and purchasing activities across all sectors. Strong consumer demand and reduced inflation have bolstered this progress, indicating positive trends for the Nigerian economy in 2025.
In February 2025, Nigeria’s economy showed the fastest productivity growth in over a year, as indicated by the Stanbic IBTC Bank’s Purchasing Manager’s Index (PMI), which rose to 53.7 from 52.0 in January. This growth reflects a solid enhancement in business conditions, marking the most substantial monthly improvement since January 2024.
The report noted that improved private sector momentum led to increased expansion rates in output, new orders, and purchasing activities, driven by rising demand and easing inflationary pressures. Specifically, the PMI gaining to 53.7 signifies a consistent strengthening of the private sector for three consecutive months.
All four monitored sectors—agriculture, manufacturing, services, and wholesale and retail—reported growth, with agriculture and manufacturing seeing the most significant increases. While wholesale and retail activity increased, it was a marginal rise. New orders also surged markedly, evidencing strong customer willingness towards new projects, coinciding with a slowdown in input cost inflation, which had its lowest increase in ten months.
Mr. Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, stated that the growth in February can be attributed to a stable exchange rate and declining fuel prices, which eased inflation and bolstered consumer demand. New orders also rose for the fourth month, further supporting output, which index increased to 56.9 from 53.7 in January.
Input price inflation eased further in February, reaching the weakest level since April 2024, though a notable portion of respondents raised their output prices. Oni highlighted that Nigeria’s real GDP growth for Q4:24 improved to 3.84% year-over-year, with overall 2024 growth reaching 3.40%, compared to 2.74% in 2023, supported by both oil and non-oil sectors.
In terms of the GDP composition for Q4:24, services contributed the largest share at 79.0%, followed by agriculture at 11.9%, with industries accounting for 9.0%. Looking forward, Oni suggested that the non-oil sector is positioned for further growth in 2025 due to improved foreign exchange stability and liquidity, as well as lower borrowing costs likely benefitting sectors such as manufacturing, trade, and real estate.
The February PMI report indicates significant growth in Nigeria’s productivity, affirming a marked recovery in the private sector over the past three months. Factors contributing to this growth include improved business conditions, rising consumer demand, and stabilizing inflation rates. As the economy prepares for 2025, expectations of further enhancement in the non-oil sector are strong, driven by favorable exchange rate conditions and reduced borrowing costs.
Original Source: www.thisdaylive.com
