Nigeria’s private sector sustained its growth momentum in April, with Stanbic IBTC’s Purchasing Managers’ Index (PMI) rising to 52.4 points.

A similar survey released earlier by the Central Bank of Nigeria (CBN) said the PMI slipped into contraction for the first time in 16 months.

The CBN’s PMI fell to 49.4 points (slightly below the cut-off point) with services and the industrial sector slipping into contraction territory.

The latest PIM maintained that escalating fuel costs linked to the Middle East conflict had pushed prices to a 16-month high while slowing the pace of expansion.

The latest reading, up from 51.9 in March, marked the third consecutive month above the 50-point threshold that signals improving business conditions, reflecting stronger demand and rising customer numbers across the economy.

Despite the improvement, firms reported that inflationary pressures, particularly higher fuel costs, continued to weigh on growth. New orders increased solidly during the month, but the rate of expansion softened as rising prices constrained demand.

The latest PMI suggested that business activities expanded at a slightly faster pace in April than in March. It noted that companies, however, said higher costs limited output growth. Activities rose in three of the four sectors monitored, with services being the only segment to record a decline.

Anecdotal evidence from the survey showed that rising fuel costs, driven by the ongoing war in the Middle East, were a key factor in price increases. Input costs rose sharply, with purchase price inflation remaining close to March’s 15-month high.

Firms passed the higher costs on to customers, resulting in a marked increase in output prices, which rose at the fastest pace since December 2024, the survey said. Staff costs, it added, also edged higher as some employers adjusted wages to cushion the impact of rising transportation fares on workers.

Employment levels rose during the month as firms responded to higher workloads, but the pace of job creation was marginal and the weakest in three months. Some businesses reportedly cited staff shortages, payment delays from customers and difficulties in securing raw materials as factors contributing to a buildup in outstanding work, which increased for the third straight month.

Head of Equity Research, West Africa at Stanbic IBTC Bank, Muyiwa Oni, said the private sector’s performance reflected improving demand conditions even as inflation remained a concern.

“The health of Nigeria’s private sector improved in April, remaining above the 50-point growth threshold for the third consecutive month, as new orders increased in line with higher customer numbers and rising demand even as price pressures remain prevalent,” he said.

Oni noted that although new orders strengthened, persistent inflation continued to limit expansion.

“Companies increased their selling prices in April to the highest level since December 2024 in response to rising fuel and raw material costs. Staff costs also increased modestly as some companies increased their staff pay to help them with increasing transportation fares,” he added.

Oni said the sustained improvement in business conditions supports expectations of stronger economic growth in the year ahead.

“The improved start of the second quarter of the year by Nigerian businesses continues to support our view of improved growth expectations in 2026 relative to 2025. We maintain our expectation that the Nigerian economy is likely to grow by 4.22 per cent year-on-year in 2026, from 3.87 per cent in 2025,” he said.