Nigeria’s private sector registered its strongest pace of job creation in almost two years as the third quarter closed.
This was disclosed in the latest Stanbic IBTC Purchasing Managers’ Index released on Wednesday.
According to PMI, the strong rate of job creation was buoyed by sustained growth in output and new orders. Rising business confidence, driven by easing inflationary pressures, resulted in firms expanding their workforce to meet growing demand. In fact, it was indicated that firms’ purchase costs increased at the slowest pace in five and a half years.
The monthly report disclosed that the country’s private sector remained comfortably inside growth territory as the third quarter of the year came to an end. The headline PMI posted above the 50.0 no-change mark for the tenth month running in September to signal a sustained improvement in the health of the Nigerian private sector.
Although falling to 53.4 from 54.2 points in August, the PMI again pointed to a solid strengthening of business conditions. New business increased markedly in September amid improvements in customer demand and the launch of new products. In line with the headline index, however, the rate of growth eased to a three-month low. The rise in new orders fed through to a sharp expansion of business activity, with increases seen across each of the four broad sectors covered by the report.
“Higher output requirements encouraged firms to expand their operating capacity in September, with both employment and purchasing activity rising. Staffing levels increased modestly but at the sharpest pace since October 2023. Meanwhile, the rate of growth in input buying remained sharp and fed through to an accumulation of inventories,” read part of the statement.
Commenting on the report, the Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said, “Nigeria’s business conditions ended the quarter on a strong note, although the pace of strengthening moderated relative to August. Specifically, the headline PMI settled at 53.4 points in September from 54.2 in August. Notably, the rate of expansion in output (56.1 points vs. August: 56.8 points) remained strong despite easing slightly when compared to August, linked to improving customer demand and better availability of materials, which enabled the firms to boost activity.
“Based on this, businesses were able to launch new products, thereby supporting an increase in new orders (55.4 points vs. August: 58.3 points), which remained above the 50-point growth threshold for the 11th consecutive month even as the rate of growth eased to a three-month low.”
Oni added that with the Nigerian economy growing by 4.23 per cent y/y in Q2:25, from 3.13 per cent y/y in Q1:25, taking H1:25 real GDP growth to 3.69 per cent y/y, from a revised average of 2.88 per cent y/y in H1:24, “The non-oil sector’s growth should remain strong into 2026 amid a likely reduction in interest rates and low inflation, both of which should support aggregate demand and private investment.
“Further, a likely lessening in exchange rate volatility in 2025 and 2026 based on our current estimates should support growth across trade, manufacturing, real estate, and construction. The PMI over Q3:25 and crude oil production in the period suggest the oil and non-oil sectors may grow by 14.3 per cent y/y and 4.4 per cent y/y, respectively, translating into overall GDP growth of 4.5 per cent y/y in Q3:25. We now lift our 2025 growth forecast to 4.0 per cent y/y, from 3.5 per cent y/y, after fully accounting for the impact of GDP rebasing and after surprisingly good Q2:25 GDP growth.”
- Oluwakemi Abimbola @ThePUNCH
