Private sector growth in Nigeria saw a significant uptick in March 2024, with the Stanbic IBTC Bank Purchasing Managers’ Index (PMI) reaching 54.3 points, up from 53.7 in February. This marks the fourth consecutive month of expansion, driven primarily by softening inflationary pressures, which led to the slowest pace of input cost increases since May 2023. The improvement in business conditions was the most pronounced since the start of 2024, signaling robust recovery in the private sector.
The March PMI report highlighted a sharp increase in new orders, with the growth rate reaching its fastest pace in 14 months. This surge in demand helped fuel a corresponding rise in output, which also showed its sharpest increase since January 2024. All sectors covered by the report experienced growth, with companies responding to rising orders by expanding their staffing levels and increasing purchasing activities.
A key factor behind this growth was the gradual decline in inflationary pressures, which not only boosted domestic demand but also encouraged businesses to build inventories. Companies took advantage of softer price inflation to stockpile inputs, ensuring they were prepared for current and future business needs. This also led to a notable increase in employment, the largest in seven months, while input buying saw a sharp rise.
Looking ahead, Muyiwa Oni, Head of Equity Research at Stanbic IBTC Bank, expressed optimism for continued private sector growth. He emphasized that the improvements in demand and business activity in Q1 2025, alongside better foreign exchange conditions, were paving the way for further expansion in the non-oil sector. The forecast for the year suggests a 3.9% year-on-year growth in Q1, and an even stronger performance for the full year 2025 compared to 2024.
Source: Leadership