By Emmanuel Thomas l Monday, Nov. 03, 2025
LAGOS, Nigeria -The Nigerian private sector saw a marked improvement in growth momentum in October, with the Stanbic IBTC Purchasing Managers’ Index™ (PMI®) rising to a robust 54.0, up from 53.4 in September. The reading, which signals a solid monthly improvement in business conditions for the eleventh consecutive month, points to the strongest pace of output growth in six months.
The increase was primarily fueled by a sharp rise in new orders and the introduction of new products, according to the survey.
Companies across the four sectors covered, led by manufacturing, all reported higher activity.
Sharper New Orders and Softening Prices
Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, noted that the strong start to the final quarter of 2025 was “on account of higher output and new orders growth.”
New orders saw an uptick (56.3 points in October versus 55.4 in September), supporting output growth (57.7 points), which hit its highest level since April.
A crucial factor underpinning the demand boost was the softening of inflationary pressures.
Although companies continued to pass on higher input costs, the latest rise in selling prices was the second-slowest for five-and-a-half years, a key indicator of moderating consumer resistance.
Inflation Outlook and Growth Forecasts
While input costs rose again in October—driven by higher purchase prices and staff costs—the overall rate of input cost inflation remained “muted” compared to the high levels recorded throughout 2023 and 2024.
Analysts at Stanbic IBTC Bank anticipate this price moderation will continue, forecasting headline inflation to fall further to between 15.84% and 16.22% y/y in October and potentially below 14.62% in November, down from 18.02% in September. This expected trend is largely attributed to the ongoing main harvest season, which is set to keep food prices at seasonal lows until December.
Muyiwa Oni stated: “Lower inflation, stabilizing exchange rate, and anticipation of further rate cuts ahead should support improvement in real sector activity over the medium term.”
The bank consequently projects the Nigerian economy to grow by 4.0% in 2025, with both the Manufacturing and Services sectors expected to see higher growth rates than in 2024.
Employment and Sentiment
To handle the surge in new orders, firms continued to take on extra staff for the fifth consecutive month, though the rate of job creation slowed slightly from September.
Increased hiring, along with the rising stocks of inputs and purchasing activity, signals firms are preparing for further business expansions.
Despite the strong performance, business sentiment regarding the year-ahead outlook dipped for the fourth month running, hitting its lowest level since May.
Nevertheless, approximately 46% of respondents still predicted a rise in output over the next 12 months, indicating a generally optimistic, albeit cautious, medium-term outlook.
