November 6, 2026/Cordros Report
According to the Central Bank of Nigeria (CBN), Nigeria’s composite Purchasing Managers’ Index (PMI) rose to 53.2 points in October (September: 53.0 points), marking five consecutive months of expansion. The improvement reflected faster expansion in agriculture (54.7 | September: 53.1 points) and industry (52.6 | September: 52.0 points), which offset the moderation in services (52.7 | September: 53.2 points). At the composite level, output (54.6 | September: 53.9 points) and employment (53.2 | September: 51.5 points) edged higher.
In contrast, new orders (52.8 | 53.7 points) marginally eased, indicating that demand continued to expand, albeit at a slower pace. The moderation reflected pressures on household and business purchasing power. Meanwhile, the composite input-price index rose to 64.0 points (September: 63.3 points), indicating stronger reported input cost pressures. Looking ahead, we expect private sector activity to remain in expansion through Q4-26, supported by harvest related agricultural activity and increased purchases ahead of the festive season. However, elevated business and operating costs could moderate the pace of improvement.
In October, Nigeria’s composite PMI rose by 0.2 points m/m to 53.2 points, extending the expansion that began in June. All three major sectors remained in expansion for a third consecutive month, while 24 of the 32 subsectors recorded expansion (September: 23 subsectors). The sectoral composition indicates that the October improvement was concentrated in industry and agriculture. In contrast to September, the month recorded simultaneous improvements in output and employment, alongside continued expansion in new orders. Output and employment indices increased to 54.6 points (September: 53.9 points) and 53.2 points (September: 51.5 points), respectively, indicating broader improvements in business activity. However, new orders eased to 52.8 points (September: 53.7 points), reflecting weaker momentum in services despite improvements in industry and agriculture.
Industry and Agriculture Gains Sustain the Expansion
The October PMI points to a continued recovery in private sector activity following the weakness recorded in Q2-26, with industry and agriculture providing the main support. Industry recorded broader improvement across new orders, employment and inventories, while agriculture expanded across all reported components. Although services remained in expansion, weaker new orders and inventory growth moderated its PMI reading.
Agriculture: The agricultural PMI increased to 54.7 points (September: 53.1 points), extending its expansion to twenty-seven consecutive months. The improvement was broad based, with farming activity rising to 56.8 points (September: 54.6 points), new orders to 55.6 points (September: 54.4 points), employment to 52.9 points (September: 51.4 points) and inventories to 53.6 points (September: 52.1 points). All five subsectors remained in expansion, with livestock recording the highest improvement (56.4 | September: 55.1 points). Crop production also strengthened to 52.8 points (September: 51.5 points). Agricultural support services also returned to expansion at 52.0 points (September: 47.6 points). At the same time, forestry and fishing also strengthened, with their indices rising to 55.3 points (September: 53.1 points) and 54.4 points (September: 53.2 points), respectively.
The stronger crop production (52.8 | September: 51.5 points) and farm yield indices (51.8 | September: 50.7 points) provide a more encouraging signal for agricultural supply. However, agricultural input prices (68.3 | September: 65.8 points) and selling prices (61.1 | September: 58.5 points) indices rose, indicating stronger reported price pressures across the sector. Overall, we see stronger agricultural activity supporting food supply and helping moderate food price pressures. However, higher production costs could limit the extent of food price disinflation.
Industry: The industrial PMI increased to 52.6 points (September: 52.0 points), marking its third consecutive month of expansion. Twelve of the sixteen subsectors recorded expansion, compared with ten in September. New orders increased to 52.1 points (September: 51.7 points), while employment (52.7 | September: 51.1 points) and inventories (51.8 | September: 51.1 points) also strengthened. At the subsector level, cement rose sharply to 60.2 points (September: 50.2 points), while motor vehicles and assembly returned to expansion at 55.8 points (September: 44.6 points). However, chemical and pharmaceutical products remained in contraction, with the index easing to 43.4 points (September: 43.9 points).
The improvement in new orders, employment and inventories suggests that industrial activity is gaining momentum. Input cost pressures moderated slightly, with the input price index easing to 62.4 points (September: 63.5 points). However, the selling prices index increased to 58.0 points (September: 56.7 points), indicating that more firms continued to report higher selling prices. Meanwhile, the outstanding business index fell further to 44.8 points (September: 47.4 points), indicating a faster contraction in firms’ backlogs. This condition could be the result of the completion of existing orders, although weaker order inflows could have contributed to it. In our view, sustained growth in new orders will therefore be important to support production activity. Seasonal inventory building and procurement ahead of festive sales could provide additional support to industrial activity in November.
Services: The services PMI remained in expansion for a fourth consecutive month, although it eased by 0.5 points to 52.7 (September: 53.2 points). The moderation reflected weaker new orders (51.7 | September: 54.5 points) and inventory growth (51.1 | September: 52.6 points). These declines partly offset improvements in business activity (54.2 | September: 54.0 points) and employment (53.5 | September: 51.7 points). Seven of the eleven subsectors recorded expansion, compared with nine in September. Finance and insurance recorded faster expansion (57.1 | September: 54.5 points), while trade growth moderated to 53.4 points (September: 56.2 points). Accommodation and food services moved into contraction, while transportation, courier and storage remained below the 50-point threshold.
The moderation in news orders indicates slower demand growth rather than an outright contraction in services demand. We noted that businesses continue to face elevated cost pressures, with input-price index rising to 62.8 points (September: 62.0 points). By contrast, the selling price index eased to 58.4 points (September: 59.3 points), suggesting that firms were reporting fewer increases in their selling prices. In our view, the divergence between input and selling price indices suggests that firms may be facing greater difficulty passing higher costs on to customers. Nevertheless, seasonal spending could support trade, hospitality and transport activity, although household purchasing power will determine the strength of the improvement.
Key Observations from the October Report
Hiring Strengthens Despite Softer Order Growth: The composite employment index rose to 53.2 points (September: 51.5 points), with hiring improving across all three sectors. This suggests that employment growth is broadening alongside the recovery in activity, potentially supporting household incomes and consumption over time. However, the moderation in new orders points to a slower pace of demand growth. Although demand continued to expand, sustained growth in new orders will be important to further hiring and production.
Domestic demand remains the clearer source of support: The composite export orders index improved to 48.8 points (September: 48.2 points) but remained in contraction. The continued expansion in total new orders, alongside contracting export and import orders, suggests that domestic demand remains the primary driver of business activity.
Cost Pressures Vary Across Sectors: Industrial input price pressures moderated, while the selling price index increased, suggesting that more firms continued to pass some cost increases on to customers. Services showed a different pattern: the input-price index increased to 62.8 points (September: 62.0 points), while selling price index eased to 58.4 points (September: 59.3 points). Together with weaker new order growth, this divergence suggest that services firms may face greater difficulty passing higher input costs on to customers.
The Macroeconomic Signal: Broader Expansion Supports Q3-26 Growth
We assess the October 2026 PMI alongside key macroeconomic indicators, including real GDP growth, inflation, the exchange rate, and the monetary policy rate, to evaluate the current state of the Nigerian economy.
Growth Outlook Remains Positive: October’s PMI reading exceeded the Q3-26 average of 52.3 points, indicating that private sector activity entered Q4-26 with stronger momentum. Stronger output and employment readings suggest that the recovery is becoming more broad based. However, a sustained recovery in new orders, particularly in services, will be important for maintaining momentum in business activity. Overall, the October PMI is consistent with our 2026E GDP growth forecast of 4.28% y/y, although sustained growth in new orders and output will be important to support the outlook.
Improved Supply Should Support Further Disinflation: Stronger agricultural activity and improved farm yield indicators should support food availability and help moderate food price pressures. Industrial input-price pressures moderated, although the input price index remained elevated at 62.4 points. In our view, improving agricultural supply and sustained exchange rate stability should support further disinflation, particularly by moderating food and imported cost pressures. However, elevated energy and distribution costs could slow the pace of moderation.
FX Conditions Remain Supportive Despite Recent Pressure: Higher FX demand has coincided with modest naira depreciation, although CBN measures have helped limit exchange rate volatility. Looking ahead, we expect the naira to remain broadly stable, supported by continued CBN efforts to manage FX market volatility, despite higher import related demand ahead of the festive season. A relatively stable exchange rate should help contain imported inflation and support further disinflation.
Further Monetary Easing Expected from 2027: We expect the CBN to maintain the MPR at 23.00% through the remainder of 2026, as elevated energy costs and renewed FX demand could complicate the disinflation process despite moderating inflation. Continued expansion in business activity, particularly in industry, may also reduce the case for an immediate rate cut, although inflation and exchange rate developments are likely to remain the primary policy considerations. In 2027, further disinflation and sustained exchange rate stability should create scope for monetary policy easing, supporting credit growth, production and investment.