The business environment for the private sector in Nigeria showed signs of improvement in May, with the Purchasing Managers’ Index (PMI) rising to 52.1 points from 51.1 points in the previous month. This marks the second-highest reading for the year, with the highest recorded in January at 54.5 points.
According to the monthly Stanbic IBTC Bank Nigeria PMI released on Tuesday, inflationary pressures eased slightly but remained significant, leading to sharper increases in both output and new orders. Data collected from approximately 400 purchasing managers in private sector companies indicated a pickup in growth within the sector.
Despite this improvement, the rates of expansion remained below the respective series averages due to high prices constraining demand. Muyiwa Oni, the Head of Equity Research West Africa at Stanbic IBTC Bank, commented on the report, stating, “The Stanbic IBTC headline PMI increased to 52.1 points in May from 51.1 in April—its highest level since reaching 54.5 points in January.”
Oni noted that while Nigeria’s private sector activity showed a better performance in May, the pace of expansion remained slower than the series average, primarily due to high prices continuing to limit demand.
The uptick in the PMI indicates a modest improvement in the operating conditions for businesses in Nigeria’s private sector. However, sustaining and accelerating this growth trajectory may depend on further measures to address inflationary pressures and boost consumer demand.
