February PMI: Nigeria Experienced Fastest Productivity Growth in 14 Months

Dike Onwuamaeze

Nigerian economy experienced its fastest growth in productivity since January 2024 in February 2025 when the PMI headline figure rose to 53.7 from 52.0 it recorded in January 2025, the Stanbic IBTC Bank’s Purchasing Manager’s Index (PMI) report has revealed.

The report said that the growth signalled a solid monthly improvement in business conditions and one that was the most pronounced since January 2024.

It said: “February data pointed to improved growth momentum in the Nigerian private sector. Rates of expansion in output, new orders and purchasing activity all quickened as demand picked up and inflationary pressures showed signs of moderating. 

“The headline PMI rose to 53.7 in February from 52.0 in January, signalling a solid monthly improvement in business conditions, and one that was the most pronounced since January 2024. The health of the private sector has now strengthened in three consecutive months.”

According to the report, “stronger customer demand and higher sales meant that Nigerian companies increased their output again in February, thereby extending the current sequence of growth to three months.”

It added that all the four monitored sectors, namely agriculture, manufacturing, services, and wholesale and retail, posted a rise in activity, although the increase in the wholesale and retail category was only fractional.

According to the report, “output was up in agriculture, manufacturing, services and wholesale & retail, although in wholesale & retail the rise was only fractional.New orders also increased at a marked pace, with the latest rise the most pronounced in just over a year.

“Customers were reportedly more willing to commit to new projects. Signs of strengthening demand coincided with moderating inflationary pressures. Overall input costs increased at the slowest pace in ten months, although the pace of inflation remained elevated amid higher prices for raw materials and a rise in staff costs that was the sharpest since March 2024,”

Commenting on the PMI report, Head of Equity Research West Africa at Stanbic IBTC Bank, Mr. Muyiwa Oni, said that activity in Nigeria’s private sector improved for the third consecutive month with the latest.

Oni attributed the growth that was recorded in February to relatively stable exchange rate and moderation in fuel prices, which supported the ease in inflationary pressures and in turn helped to strengthen consumer demand in the month.

He said: “Thus, new orders increased for the fourth consecutive month, with survey participants noting a greater desire on the part of customers to commit to new projects. In line with the increase in new orders, output also increased sharply in February as the output index settled at 56.9 points from 53.7 points in January.

“That said, input price inflation eased further in February to its weakest level since April 2024. However, about 39.0 per cent of respondents increased their output prices in the month, with less than 1.0 per cent lowering their charges.”

He also said that “Nigeria’s real GDP growth improved further in Q4:24, rising by 3.84 per cent y/y, from 3.46 per cent y/y in Q3:24. Growth in Q4:24 was the highest since Q4:21 when this economy grew by 3.98 per cent y/y in real terms. Q4:24 GDP now brings 2024 full-year growth to 3.40 per cent, from 2.74 per cent in 2023, supported by both the oil and the non-oil sectors.”

Oni remarked that in terms of contributions to the overall GDP growth in Q4:24, services continue to dominate with a 79.0 per cent contribution to the country’s GDP growth (same as Q3:24), followed by agriculture with an 11.9 per cent contribution while industries contributed the remaining 9.0 per cent of the real GDP growth in the review quarter.

 “The non-oil sector of the Nigerian economy is now poised to improve further in 2025 as the lingering FX stability and improved FX liquidity bodes well for the real sector activities, including manufacturing, trade and real estate. This, in addition to the anticipated reduction in borrowing costs should further support the growth of the non-oil sector in 2025,” he said.