PMI Report: Growth in Private Sector’s Suffered 0.7% Decline in January

Dike Onwuamaeze

In spite of sustaining the nascent growth in the Nigerian private sector that was witnessed in December 2024, the sector’s productivity suffered a marginal decline of 0.7 per cent in January 2025.

According to the Stanbic IBTC Bank Purchasing Managers’ Index (PMI) report for January 2025, growth in the productivity of the private sector dropped from 52.7 per cent that was recorded in December 2024 to 52.0 per cent in January 2025.  

The report stated that readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

The report said: “The headline PMI posted 52.0 in January, down from 52.7 in December but still above the 50.0 no-change mark, therefore, signalling a second successive monthly improvement in the health of the Nigerian private sector.”

Even though business activity rose solidly in January, after having returned to growth in December, the PMI’s report stated that “the rate of expansion eased from the previous month.”

The report also projected that growth is likely to pick up across manufacturing and trade. It identified cement, food, chemicals and pharmaceutical products as the key sub-sectors that have been exceeding the manufacturing sector’s growth since Q4:22.

The report also showed that inflationary pressure is waning. “There were signs of inflationary pressures softening in January. Although rates of increase in both input costs and output prices remained elevated, in both cases the rises were much weaker than seen in December.

“Overall input price inflation was the slowest since April 2024, while charges increased at the weakest pace in six months,” the report said.

Commenting on the PMI report, the Head of Equity Research West Africa at Stanbic IBTC Bank, Mr. Muyiwa Oni, said that “Nigeria’s private sector activity sustained its improvement in January 2025, albeit lower than levels seen in December 2024.

 “Elsewhere, input prices increased at a slower pace while the pace of increase in output prices is the slowest since July 2024.”

“Headline inflation averaged 33.18 per cent year-on-year (y/y) in 2024 from an average of 24.52 per cent y/y in 2023 mostly driven by significant foreign exchange (FX) depreciation; renewed petrol price increases in line with full petrol price liberalisation; structurally low food supplies exacerbated by high extreme weather conditions; and increased food demand, especially during the festive season,” Oni said.

He projected a moderation in the inflation rate in 2025 although the pace of the moderation is only likely to be faster in late Q3:25.

“Notably, we expect headline inflation to average 30.5 per cent y/y in 2025 and end the year at 27.1 per cent y/y. In 2025, we project the non-oil sector to grow by 3.2 per cent y/y from an estimated 3.0 per cent y/y in 2024.

“Growth is likely to pick up across manufacturing and trade, while ICT and finance and insurance should continue to play a big role in economic performance.

“However, agriculture will likely still lag its long-term average amid lingering internal security challenges, high input costs, and extreme weather conditions,” Oni said.