Nigerians expect inflation to recede within six months, task
CBN business and economic activities have marginally expanded for the second consecutive month, according to the composite Purchasing Managers’ Index (PMI) of the Central Bank of Nigeria (CBN) for January 2025, at 50.2 index points, signalling a slight improvement in economic activities for the second straight month.

PMI reading above 50 points signals an expansion in business activities, while a reading below 50 points suggests a contraction. An index of exactly 50 points signifies no change in economic conditions.

However, inflation is expected to gradually reduce over the next six months, the CBN inflation expectations survey report for January 2025 has revealed.

Three sectors, namely industry, services and agriculture, largely drove this expansion. The industry sector improved from a stationary position in December 2024 to an expansionary level in January 2025, while the services sector index indicated a contraction in economic activities for the month. The agriculture sector registered expansion for the sixth consecutive month.

A further index breakdown showed that composite output, new orders and employment levels recorded growth at 50.9, 50.2 and 50.2 points, respectively, reflecting overall expansion during the review period.

Meanwhile, the composite stock of raw materials declined to 49.8 points while suppliers’ delivery time slowed further to 49.6 index points, suggesting delays in supply chains.

An analysis of the 36 sub-sectors reviewed across industry, services and agriculture indicated that 17 sub-sectors reported growth in economic activities, with the transportation equipment sub-sector recording the highest expansion. Conversely, 17 sub-sectors experienced a decline, with forestry posting the steepest contraction, while two sub-sectors remained unchanged.

The Industry Sector PMI revealed that of the 17 sub-sectors surveyed, 10 recorded expansions, six showed contractions, while the plastic and rubber products sub-sector remained stable.

Transportation equipment emerged as the leading sub-sector in terms of expansion, whereas the non-metallic mineral products sub-sector experienced the highest level of contraction. The overall industry sector index stood at 51.3 points, confirming an expansion in industrial activities for January 2025.

A breakdown in the industry sector indicated that output and employment levels grew, standing at 54 and 52.4 points, respectively.

New orders and stock of raw materials both declined to 49.6 points. Suppliers’ delivery time also remained sluggish, recording 49.6 index points. Conversely, the services sector experienced a contraction, as reflected in its PMI of 48.6 points for January 2025.

Among the 14 sub-sectors assessed, only three recorded expansions, while 10 experienced contractions, as the management of companies’ sub-sectors remained stationary.