Nigeria’s private-sector activity strengthened in the third quarter of 2026, with purchasing managers’ surveys showing faster growth in September as demand improved and industrial activity recovered.
The Central Bank of Nigeria’s (CBN) Composite Purchasing Managers’ Index (PMI) rose to 53.0 points in September from 52.7 in August, marking the fourth consecutive month of expansion in overall economic activity. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.
The improvement was supported by stronger new orders, output, employment and inventories. Of the 32 subsectors covered by the CBN survey, 23 recorded expansion while nine contracted.
Industry drives September improvement
The industrial sector recorded one of the biggest improvements during the month.
Industry PMI increased to 52.0 points in September from 50.6 in August, marking its second consecutive month of expansion. Industrial output rose to 53.2, while new orders reached 51.7 and employment stood at 51.1.
Ten of the 16 industrial subsectors recorded growth, with Water Supply, Sewerage and Waste Management posting the strongest expansion. Chemical and Pharmaceutical Products recorded the sharpest contraction.
The recovery in industry is significant because the sector had remained under pressure earlier in the year. Its return to expansion in August marked the first improvement after months of contraction.
Services and agriculture remain resilient
The services sector maintained its expansion in September, with its PMI standing at 53.2 points compared with 53.3 in August.
Nine of the 11 services subsectors surveyed recorded growth. Educational Services recorded the strongest expansion, while Professional, Scientific and Technical Services recorded the steepest decline.
Agriculture also remained in expansion territory, although its PMI eased slightly to 53.1 from 53.4. The sector has now recorded growth for 26 consecutive months.
Four of the five agricultural subsectors expanded, with livestock recording the strongest performance.
Stronger demand supports businesses
New orders were one of the main drivers of the September improvement. The CBN’s New Orders Index rose 1.9 points to 53.7, recording the strongest month-on-month improvement among the major composite indicators.
Output remained at 53.9, while the raw-materials inventory index increased to 52.1. Supplier delivery times also improved, reaching 52.7. Employment, however, moderated to 51.5 from 52.4 in August.
A separate Stanbic IBTC PMI survey also pointed to stronger private-sector activity. Its headline PMI climbed to 56.4 in September from 54.3 in August, the highest level recorded since February 2022.
The Stanbic survey attributed the improvement largely to stronger customer demand and the launch of new products, which helped new business increase for an eighth consecutive month.
Rising costs remain a concern
Despite stronger activity, businesses continued to face cost pressures.
The CBN said the composite input price index increased by 0.8 points in September, while the output price index fell by 0.5 points. This suggests that some businesses faced higher input costs while having limited room to increase prices.
The gap between stronger demand and rising costs could continue to affect business margins if companies are unable to pass higher expenses on to customers.
What the numbers mean
The September figures point to a broader recovery in Nigeria’s economic activity, with industry joining services and agriculture in sustained expansion.
However, the data also show that the recovery remains uneven. Stronger orders and output are being accompanied by cost pressures, while employment growth remains relatively modest.
For businesses, the acceleration in PMI during the third quarter suggests improving demand and operating conditions. Sustaining that momentum will depend on whether companies can manage rising input costs while converting stronger demand into higher production, investment and employment.
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