By Opeyemi Oye-
Nigeria’s private sector is surging into the third quarter of 2025 with renewed strength, recording its fastest pace of job creation in nearly two years, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI) report.
The headline PMI rose sharply to 54.0 in July, up from 51.6 in June — its highest level since April, signalling a “solid improvement” in overall business conditions.
“Rising new orders and efforts to speed up the completion of projects encouraged firms to take on extra staff at the fastest pace since October 2023,” the report stated.
The growth in employment was driven by a strong rebound in output and new orders, reflecting improved customer demand and easing inflationary pressures.
“The data suggests companies are regaining confidence, with hiring, output, and inventories all rising simultaneously,” Stanbic IBTC analysts said.
The report also noted that stronger staffing levels helped firms manage workloads more effectively, stabilising backlogs that had been rising in recent months.
Improved demand was partly attributed to new product launches and a slowdown in inflation, which spurred a rise in business activity and purchasing. Firms responded by ramping up purchasing activity and building up inventories, supported by quicker supplier delivery times.
On the cost front, trends were mixed. Purchase price inflation eased for the third consecutive month, hitting its lowest point since April 2020. However, overall input costs remained high, largely due to naira depreciation and rising prices of raw materials.
Notably, staff costs surged, marking the steepest rise in five months, as firms sought to cushion employees from rising living costs, especially transport expenses.
“Some companies reportedly leveraged softer input cost pressures to offer discounts in a bid to secure new business,” the report added.
Even with rising costs, output price inflation moderated, indicating that many businesses were reluctant to pass on the full burden to consumers.
Looking forward, the report revealed sustained business optimism, albeit slightly lower than the three-year high recorded in June. Companies remain upbeat about output growth, with many pointing to capital-raising plans and new marketing strategies as reasons for their confidence.
“This is a positive signal for the economy — firms are expanding, customers are spending again, and inflation is finally easing,” said a Lagos-based economist who reviewed the data. “If this trend continues, we may see broader economic recovery by year-end.”
