Business confidence in Nigeria reached its highest point in 14 months in March, as businesses experienced rising demand for their goods and services. According to Stanbic IBTC’s latest Purchasing Managers’ Index (PMI), the headline index rose to 54.3, up from 53.7 in February, signaling a continued expansion in business activity. A PMI reading above 50 indicates growth, and this latest increase reflects four consecutive months of improvement, driven by a surge in new orders—the fastest increase in over a year.
The growth was primarily fueled by stronger domestic demand, leading to increased output across key sectors such as manufacturing, trade, and real estate. The easing inflationary pressures also played a crucial role in this upturn, with input cost inflation reaching its lowest level since May 2023. This decrease in inflation, combined with the reduction in core inflation to 23.01% in February, bolstered confidence in the private sector and allowed businesses to plan for stable cost conditions in the coming months.
Additionally, businesses reported a sustained decline in the pace of price increases for goods and services for the third consecutive month. This softening of inflation allowed firms to stockpile inputs, further fueling optimism for future growth. The overall business sentiment remained positive, with an increase in employment levels marking the largest rise in seven months. Although some businesses opted for contract-based hiring, the job market sentiment remained optimistic, supporting the overall positive outlook for the private sector.
The improvement in business confidence and activity coincides with a decrease in Nigeria’s headline inflation rate, which fell to 23.18% in February, down from 24.48% in January. This suggests that the country is experiencing a period of economic stabilization, with businesses benefiting from both lower inflation and growing demand, signaling a potential for continued economic growth in the coming months.
Source: Business day