New business orders by the private sector expanded sharply in November, sustaining over a year of continuous growth and driving the purchasing managers’ index (PMI) to 53.6 points, an indication of steady improvement in business conditions, despite a slight easing from October’s 54 points.
This marks the 13th month of expansion, a trend propelled by easing inflationary pressures, successful new product launches and expanding customer demand across key sectors.
The Stanbic IBTC Bank PMI sits comfortably above the 50-point threshold that separates expansion from contraction, reflecting a robust private sector where output growth, although moderating slightly, remained strong across agriculture, manufacturing, wholesale and retail trade and services.
Respondents attributed growth to higher sales volumes, additional customers secured, and the introduction of innovative products that have helped businesses tap into untapped markets. Manufacturing and services were the main drivers behind output expansions in November.
Crucially, inflationary pressures showed notable signs of easing, offering relief to businesses and contributing to the positive trajectory. Input costs increased at the slowest rate in almost five years, with softer rises in purchase prices and labour costs enabling firms to control expenses more effectively.
Output price inflation, meanwhile, softened for the sixth time in seven months to its weakest since April 2020, mirroring input trends and giving firms room to compete on volume rather than margins.
Purchasing activity in November surged to a seven-month peak as companies stocked up inventory in anticipation of continued demand, resulting in the fastest accumulation of stocks since June 2023. However, employment growth slowed to a marginal pace, indicating caution in workforce expansion despite rising business activity.
Backlogs of work increased for the first time in four months due to delayed customer payments, though supplier delivery times improved, shortening for the fifth consecutive month and easing supply chain pressures.
The Head of Equity Research, West Africa at Stanbic IBTC Bank, Muyiwa Oni, said that the sustainable rise in new orders and output reflects the benefits of easing inflation combined with broader economic support from government infrastructure investments, trade facilitation, and the ongoing positive impact of Dangote Petroleum Refinery.
Oni added that with inflation softening and the exchange rate gradually stabilising, sectors such as manufacturing, services, and retail are poised for stronger performance in 2025.
Looking ahead, Stanbic IBTC projects Nigeria’s economy will grow by 4.0 per cent in 2025, with the manufacturing and services sectors likely to lead this expansion. Lower interest rates aligned with inflation containment and exchange rate stabilisation should further stimulate private consumption and business investment into 2026, broadening the base of sectors contributing to real GDP growth and improving living standards across the country.
