Report: Manufacturing Sector Posts Sharpest Rise in Input, Output Costs

Dike Onwuamaeze

The manufacturing sector posted the sharpest rise in input and output costs in December 2025 among the sectors that were covered by the Purchasing Managers’ Index (PMI) report of the Stanbic IBTC Bank Nigeria while the services recorded the slowest pace of inflation.

The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail and services.

The report attributed the rise in input and output prices to hikes in prices for raw materials, which led to a further rise in purchase costs in December.  

The report also said that manufacturing was the only sector that failed to experience rise in employment in December 2025.

Commenting on the PMI report, the Head of Equity Research West Africa at Stanbic IBTC Bank, Mr. Muyiwa Oni, said; “While overall input prices increased sharply in December from the near five-year low posted in November, the rate of inflation was weaker than the 2025 average. Because of this high input cost, selling prices also increased in December with the most significant price increase seen in the manufacturing sector.”

The report added, “the pass through of higher raw material costs to customers resulted in a marked monthly rise in selling prices during December,” with the manufacturing posting the sharpest rise in price.

“The rate of inflation was only slightly quicker than the five-and-a-half year low posted in November. However, the sharpest increase in charges was in the manufacturing sector, while the slowest was in wholesale and retail.”

It said: “Nigerian companies increased their staffing levels for the seventh month running in December amid rising customer demand. That said, the pace of job creation was only marginal and the slowest since last June. Employment rose in three of the four monitored sectors, the exception being manufacturing.”

Overall, the PMI report stated that the Nigerian private sector remained in growth territory at the end of 2025 as improvements in customer demand fed through to higher new orders, output and purchasing activity.   

It stated:  “The final month of 2025 saw a further marked expansion in business activity in Nigeria’s private sector, with the rate of growth little-changed from that registered in November.

“Output has now risen in 13 consecutive months. Respondents linked growth to new orders from both new and existing customers, with some noting tailwinds from softer inflationary pressures. Activity increased across all four monitored sectors, led by agriculture.”

It added that purchasing activity also increased during December. “The latest rise was sharp, albeit the softest in three months. Anecdotal evidence suggested that input buying was expanded in line with improving customer demand,” the report said.

According to Oni, the headline PMI (53.5 vs November: 53.6) moderated for the second consecutive month in December, although still in the growth territory and the latest reading is broadly in line with the average for 2025 as a whole.

“The continued expansion in business activity in December, albeit slightly softer than November, reflects higher customer demand, which supported a marked monthly increase in new orders. This in turn encouraged companies to expand their purchasing activity and inventory holdings.

“Meanwhile, there was a marked improvement in business confidence among the companies as sentiment hit a six-month high, linked to planned investments in business expansions, including opening of new branches and plans to boost products exports,” he said.