Nigeria’s private sector kicked off the third quarter of 2025 with strong momentum, recording the fastest rate of job creation in nearly two years, according to the Stanbic IBTC Purchasing Managers’ Index (PMI).
The headline PMI rose to 54.0 in July from 51.6 in June, the highest since April, signalling a solid improvement in business conditions.
Stanbic IBTC said the sharp increase in employment was fuelled by a strong rebound in output and new orders, reflecting improving demand and easing inflation.
“Rising new orders and efforts to speed up the completion of projects encouraged firms to take on extra staff at the fastest pace since October 2023,” the report said.
The improvement in staffing helped stabilise backlogs, which had been increasing in previous months, while businesses were also able to better meet rising demand.
The report highlighted that improved customer demand, supported by new product launches and a slowdown in inflation, contributed to higher business activity.
To meet growing orders, companies increased purchasing activity, resulting in a notable build-up of inventories, aided by quicker supplier delivery times.
Cost trends were mixed. While purchase price inflation slowed for a third straight month — reaching its lowest point since April 2020 — input costs remained elevated due to naira depreciation and rising raw material prices.
However, staff costs saw a sharp increase — the highest in five months — as companies tried to cushion employees against higher living expenses, particularly transportation.
“Some firms reportedly took advantage of softer purchase cost pressures to offer discounts in a bid to secure new business,” the report added.
Despite the rising input costs, output price inflation also eased, suggesting firms were reluctant to fully pass on higher costs to customers.
Looking ahead, businesses remain optimistic about output growth, though confidence slightly declined from the three-year high recorded in June.
Firms anticipating expansion linked their optimism to capital-raising plans and new marketing strategies.
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