Nigeria PMI Slows to 7-Month Low at 51.6 Amid High Business Confidence
Nigeria’s private sector momentum has taken a slight dip, as the latest Purchasing Managers’ Index (PMI) dropped to 51.6 in June, marking a 7-month low. Despite the slowdown, the index still reflects expansion, and analysts say business confidence remains high across key sectors of the economy.
The latest PMI data, released by Stanbic IBTC Bank, highlights a modest deceleration in business activity and new orders, largely attributed to rising operating costs, raw material shortages, and foreign exchange pressures. Nonetheless, the index remains above the 50.0 threshold, indicating continued, albeit slower, growth in Nigeria’s non-oil private sector.
A reading of 51.6 reflects weaker growth when compared to previous months, but businesses remain optimistic about future output. The report cited strong levels of business confidence, driven by expectations of improved supply chains, economic reforms, and stronger consumer demand in the second half of the year.
Manufacturing and services sectors showed varying performance, with some companies facing delays due to logistic disruptions and increased fuel prices. However, many firms noted that customer demand remained resilient, even as they adjusted pricing strategies to manage input cost inflation.
The PMI report also revealed that employment levels rose marginally, as firms hired more staff in anticipation of increased activity in the coming months. Input cost inflation remained elevated, but output prices also rose in response, helping businesses to maintain profit margins.
Economists see the slight slowdown as a reflection of temporary pressures rather than a structural weakness in the economy. As reforms take shape and the macroeconomic environment stabilizes, Nigeria’s private sector is expected to regain stronger momentum.
