February PMI Indicates Nigeria’s Fastest Productivity Growth in 14 Months

In February 2025, Nigeria reported its fastest productivity growth in 14 months, with the PMI rising to 53.7 from 52.0. Improved business conditions were noted across all sectors, driven by increased output, new orders, and moderated inflation. Mr. Muyiwa Oni attributed these trends to stable economic conditions and anticipated ongoing growth potential in 2025.

In February 2025, Nigeria’s economy experienced its fastest productivity growth in 14 months, as reported by the Stanbic IBTC Bank’s Purchasing Manager’s Index (PMI). The PMI headline figure increased to 53.7 from January’s 52.0, indicating a significant improvement in business conditions and marking the strongest growth since January 2024. Growth momentum in the private sector was notably enhanced, with increased output, new orders, and purchasing activity as demand rose and inflationary pressures appeared to ease.

The report highlighted that Nigerian companies ramped up their output for the third consecutive month, supported by stronger customer demand and higher sales. All four monitored sectors—agriculture, manufacturing, services, and wholesale and retail—reported increased activity, although the growth in wholesale and retail was marginal. The rise in new orders was pronounced, reflecting a greater willingness among customers to initiate new projects.

Moreover, the report indicated that overall input costs rose at the slowest pace in ten months, even though inflation remained high due to increased raw material costs and personnel expenses. Mr. Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, commented on the PMI report, noting the positive changes in the private sector activity for the third month in a row. He attributed the growth in February to a relatively stable exchange rate and reduced fuel prices that eased inflationary pressures, thereby boosting consumer demand.

Oni also remarked that new orders had increased for the fourth consecutive month, as customers showed heightened interest in new projects. The output index further climbed to 56.9 points from 53.7 in January. Furthermore, input price inflation decreased to its lowest level since April 2024, though nearly 39.0 percent of companies had increased their output prices during the month.

Regarding the economy’s overall growth, Oni indicated an improvement in Nigeria’s real GDP growth, which rose to 3.84 percent year-on-year in Q4:24, up from 3.46 percent in Q3:24. This growth rate was the highest achieved since Q4:21 and resulted in an overall growth of 3.40 percent for 2024. The services sector contributed significantly to this growth, making up 79.0 percent of the GDP increase, followed by agriculture at 11.9 percent and industries at 9.0 percent. Looking forward, Oni expressed optimism about the non-oil sector’s growth potential in 2025 due to improved foreign exchange stability and liquidity, as well as expected reductions in borrowing costs.

In summary, Nigeria’s economic landscape showed promising signs of recovery in February 2025, with the PMI indicating the fastest productivity growth in 14 months. The increase in business activity across all sectors, coupled with improving consumer demand and moderated inflationary pressures, reflects a positive trajectory for the Nigerian economy heading into 2025. Continued support from stable exchange rates and reduced fuel prices may sustain this growth momentum.

Original Source: www.thisdaylive.com