February 20, 2025/CSL Research
The Central Bank of Nigeria (CBN) recently released the Purchasing Managers’ Index (PMI) survey for January 2025, covering three key sectors: Industry, Services, and Agriculture. The January 2025 composite PMI score stood at 50.2 points, indicating an expansion in economic activities for the second consecutive month after an expansion reading of 51.0 points in December 2024. Typically, an index above 50.0 points signals growth in business activities, while a reading below this threshold indicates contraction.
Across the PMI indicators for the month, output level expanded the most at 50.9 points, compared to 53.9 points in December 2024. New orders also recorded expansion at 50.2 points, also slower when compared to 52.5 points in the previous month, reflecting moderated production and demand following the festive season. Employment level at 50.2 points (an uptick from the prior month at 49.8 points) showed improved stability in the labour market while suppliers’ delivery time and stock/inventory of raw materials both remained in contraction at 49.6 points and 49.8 points, continuing the trend from Q4 2024.
Sectoral performance showed the agriculture expanded for the sixth consecutive month with a PMI of 52.5 points while Industry maintained growth at 51.3 points, marking its second straight
month of expansion. Conversely, the Services sector (48.6 points) slipped back into contraction, reversing December’s brief expansion at 52.1 points.
Notably, output levels increased across all sectors except Services, where a significant decline in post-festive activities—particularly in arts, entertainment & recreation, accommodation & food services, and transportation & warehousing—led to a downturn in key PMI indicators for the sector. Looking ahead, overall production levels and composite output are expected to remain in expansion territory.
This outlook is supported by expectations of moderating inflation, which could lead to lower purchase costs. Meanwhile, the improvement in the Industry sector’s PMI to 51.3 points (up from 50.0 points in December 2024), reflects better operating conditions as challenges related to foreign exchange volatility and currency depreciation subside. However, legacy issues—including high funding and energy costs, elevated import and input expenses, infrastructure deficits, and supply chain disruptions continue to pose risks to near- to mid-term economic recovery in the real sector.
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