In February 2025, Nigeria’s PMI rose to 53.7, indicating the fastest productivity growth in 14 months, with significant improvements across all sectors. Easing inflation and increased customer demand contributed to the enhancement in business conditions, leading to a notable increase in output and new orders. GDP growth was reported at 3.84% in Q4:24, indicating a favorable economic trend going into 2025.
The Nigerian economy recorded its most significant productivity growth in 14 months as the Purchasing Managers’ Index (PMI) rose to 53.7 in February 2025, up from 52.0 in January 2025. This increase reflects a notable improvement in business conditions, marking the most substantial change since January 2024. The report indicates that the private sector exhibited enhanced growth momentum with expansions across output, new orders, and purchasing activities amid a rise in demand and easing inflationary pressures.
As per the findings, increased customer demand led to a rise in output among Nigerian companies, extending the growth sequence to three months. All four sectors monitored—including agriculture, manufacturing, services, and wholesale and retail—experienced activity growth, though the rise in wholesale and retail was modest.
Notably, new orders accelerated at a noteworthy pace, representing the most significant rise in just over a year, as customers seemed more inclined to engage in new projects. This growing demand coincided with a slowdown in input cost inflation, which reached its lowest pace in ten months, despite ongoing increases in raw material costs and a surge in staff expenses—the highest since March 2024.
Mr. Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, remarked that the continued improvement in the private sector activity is attributed to a stable exchange rate and moderated fuel prices, which have alleviated inflationary pressures, thereby enhancing consumer demand. Furthermore, the output index rose to 56.9 in February from 53.7 in January, driven by a persistent rise in new orders.
In terms of GDP, Nigeria’s real growth improved to 3.84% year-on-year in Q4:24, compared to 3.46% in Q3:24, the highest since Q4:21. This growth contributes to a full-year increase of 3.40% for 2024, bolstered by performance in both oil and non-oil sectors. Services maintained the largest contribution to GDP growth at 79%, while agriculture and industries contributed 11.9% and 9%, respectively.
Looking ahead to 2025, the non-oil sector is expected to advance further, supported by stable foreign exchange conditions and improved liquidity, potentially lowering borrowing costs and facilitating further growth in manufacturing, trade, and the real estate sector.
In conclusion, Nigeria’s PMI report for February 2025 highlights significant productivity growth within the private sector, reaching levels not seen in over a year. With all sectors reporting increased activity and new orders rising sharply, the economic outlook appears positive. This growth is reinforced by favorable exchange rates and moderated inflation, which may support continued expansion in the non-oil sector moving into 2025.
Original Source: www.thisdaylive.com
