Nigeria’s private sector has recorded its strongest employment growth in nearly a year, buoyed by rising demand and easing inflationary pressures. According to the latest Purchasing Managers’ Index (PMI) data released by Stanbic IBTC Bank and compiled by S&P Global, the PMI rose to 54.0 in July 2025, marking its highest level since April and signaling continued recovery in the non-oil private sector.
The July figure represents a significant improvement from 51.6 in June, and extends the sector’s growth streak to eight consecutive months, indicating a sustained period of expansion in business activity across the country.
“The headline PMI rose to a three-month high of 54.0 in July, up from 51.6 in June. The reading signalled a solid monthly improvement in the health of the private sector,” the report stated.
Employment Growth at Highest Since October 2023
One of the standout developments in the report was the sharp uptick in employment—the strongest recorded since October 2023. The hiring surge was attributed to a marked increase in new business orders and production output, as companies responded to growing customer demand by expanding their workforce and boosting capacity.
“Stronger inflows of new work encouraged firms to increase staffing levels and purchasing activity,” the report added, noting that business confidence remained broadly positive, with firms anticipating further growth in the coming months.
Inflation Pressures Ease Slightly
The report also highlighted a softening in inflationary pressures, which had previously weighed heavily on business operations. With price increases for inputs and outputs moderating slightly, many firms found renewed room to invest in productivity and human capital.
Although cost pressures remain elevated, the slower pace of inflation offered temporary relief for businesses navigating volatile market conditions. This was reflected in improved sentiment and a willingness to hire more staff, restock inputs, and expand operations.
Sectoral Resilience Amid Structural Challenges
Nigeria’s PMI has remained above the critical 50-point threshold since December 2024, despite ongoing structural challenges in energy supply, foreign exchange availability, and infrastructure. Analysts say the resilience of the non-oil private sector—particularly in services, manufacturing, and consumer goods—is a positive signal for the broader economy.
Economists view the latest data as a sign of cautious optimism. “The steady rise in PMI, especially with stronger employment growth, suggests that the private sector is adjusting to macroeconomic pressures and slowly regaining momentum,” said one financial analyst.
Outlook: Private Sector Eyes Sustainable Growth
With global economic conditions remaining uncertain, Nigerian firms are expected to remain cautiously optimistic in their business planning. Analysts warn that policy consistency, further easing of inflation, and improved access to credit will be critical to sustaining the current growth trajectory.
The Stanbic IBTC PMI is a leading indicator of business performance and is closely watched by policymakers, investors, and businesses for insights into the country’s economic health outside the oil sector.
