July 2, 2025/CSL Research
Nigeria’s private sector activity lost momentum in June 2025, with growth easing to a seven-month low, according to the latest Stanbic IBTC Bank Purchasing Managers’ Index (PMI). The headline index fell to 51.6, down from 52.7 in May, reflecting the slowest rate of expansion since the current recovery began in late 2024. While the reading remains above the neutral 50.0 mark—indicating continued, albeit modest, growth—the slowdown underscores the fragile and uneven trajectory of Nigeria’s economic rebound.
The slowdown was primarily driven by a marked deceleration in output, new orders, and purchasing activity. Manufacturing emerged as the main drag on growth, recording a contraction in production, while agriculture and services posted only modest gains.
New business volumes rose at the weakest rate in five months, reflecting softer customer demand despite pockets of new client acquisition. Employment levels remained broadly unchanged after a marginal dip in May while inventory accumulation hit a seven-month low, reflecting conservative procurement amid softer demand.
For investors, the data reveals a mixed landscape. On one hand, the softening in output, new orders, and purchasing activity points to subdued near-term momentum—particularly within the manufacturing sector, which recorded a contraction in June. Demand weakened across key industries, with new business growth hitting a five-month low, and inventory levels rising at the slowest pace in the current cycle. However, inflationary pressures have started to ease—headline inflation dipped for a second consecutive month to 22.97% in May—signalling that recent monetary and fiscal reforms may be beginning to take effect.
Though structural bottlenecks persist, including supply-chain disruptions, delayed payments, and chronic power shortages, investor sentiment is buoyed by improved macroeconomic stability and renewed corporate optimism. Encouragingly, business confidence reached its highest level since August 2022, with many firms planning infrastructure investments and operational scale-ups. This suggests the private sector is positioning itself for growth, provided reforms continue and policy support remains strong.
While June’s slowdown underscores Nigeria’s challenging operating environment, the combination of macroeconomic reforms and rising business confidence suggests the medium-term trajectory is improving. Inflation is expected to continue gradually moderating, and real GDP growth could approach higher rates over the next two years, provided reforms stay on course. In the near term, investors should expect uneven sector performance, with manufacturing and construction likely to lag, while consumer goods, agriculture, and technology-related sectors show greater resilience. Policy continuity, improvements in power supply, and access to affordable credit will be critical to unlocking sustained growth.
Click here to download full report: CSL Nigeria Daily – 02 July 2025- PMI.pdf
