Business activity in Nigeria maintained a steady trajectory in January 2025, the latest Purchasing Managers’ Index (PMI) report said. The monthly PMI survey conducted by Stanbic IBTC Bank Plc indicated that the headline index, which serves as a comprehensive gauge of the state of the economy, stood at 52 points in January, a marginal decline from 52.7 points in December.

Yet, the reading indicates an improvement from November 2024, where the index stood at 49.6 points. Readings above 50 points suggest a positive shift in business conditions, while those below indicate a contraction.

“The nascent growth in the Nigerian private sector seen at the end of 2024 was sustained into the first month of 2025, with new orders and business activity each continuing to rise. Moreover, there was a large improvement in business confidence while firms expanded employment, purchasing and inventories,” the report stated.

According to the report, though input costs and output prices continued to rise, respective rates of inflation were much slower than in December. Buoyed by growing customer demand and a growing willingness to embark on new projects, the output and new orders by private sector operators witnessed an uptick in January.

This encouraging trend was echoed by an increase in new businesses for the second month in a row, albeit at a softer pace than the previous month (December), the report stated.

The report also showed an increase in the optimism of Nigerian companies towards their prospects, as January saw a sharp rise in the number of businesses considering expansion plans and marketing initiatives.

The positive shift in sentiment among companies was underpinned by their renewed confidence in the potential for future growth, leading to the adoption of strategies that aim to support increased output in the year.

The survey also found evidence that inflationary pressure was beginning to ease in January, as both input cost increases and output price hikes slowed down significantly from the December 2024 level.

The development marked a notable deceleration in inflationary pressure, with overall input price inflation reaching its lowest point since April 2024 and output price increases posting their weakest growth rate in six months.

“Efforts to satisfy customer requirements promptly led companies to expand their staffing levels, purchasing activity and inventory holdings at the start of the year. In each case, the rises were the second in as many months. In particular, the accumulation of stocks of purchases was the most pronounced in just over a year and a half.

“The attempts to get through projects quickly meant that firms were more successful in depleting backlogs of work, which decreased at a solid pace that was the most pronounced since June 2022. Finally, suppliers’ delivery times continued to shorten amid good arrangements with vendors and prompt payments,” the report said.