Nigeria’s private sector rebounded in February with business conditions improving sharply after a brief dip at the start of 2026, the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) suggested.

The headline PMI climbed to 53.2 in February from 49.7 in January, moving back above the 50 threshold that separates expansion from contraction and signalling a broad recovery in business activity. The improvement followed a muted start to the year when growth stalled.

The rebound was led by renewed increases in new orders as stronger customer demand and better product affordability supported firms across key sectors.

Output expanded at the fastest pace in four months, and employment levels rose for the ninth consecutive month as companies stepped up hiring to meet higher workloads.

All four sectors monitored by the survey recorded growth in February, with wholesale and retail returning to expansion after a slowdown in January. Firms also expanded purchasing activity and built up inventory holdings to respond to the increased demand.

However, the report highlighted that backlogs of work increased sharply, reflecting delayed customer payments, shortages of staff and materials, and persistent challenges with power supply that firms continue to navigate.

Inflationary pressures eased notably during the month, with purchase cost inflation and output price rises slowing to their weakest in over six years.

Analysts attributed the moderation in cost pressures partly to recent strength in the naira, which traded below N1,400/$ for several weeks, helping businesses manage input costs.

Commenting on the data, Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said local currency trends had a positive effect on the price environment.

“Local currency appreciation helped support softer input and output prices in February,” he said, noting that improved foreign exchange flows and remittances had helped ease cost pressures for firms.

Oni added that the outlook for the broader economy looks positive. He noted that Nigeria’s economic growth is expected to be 3.86 per cent year-on-year in the first quarter of 2026, with full-year growth forecast at around 4.1 per cent.

He cited visible government investment in infrastructure, easing trade constraints and renewed capital inflows into key sectors, including oil, gas and manufacturing, as factors supporting recovery.

Business confidence also improved in February, although sentiment remained cautious as firms assessed the durability of the recovery. Many companies cited plans to expand advertising and investment as reasons for optimism about output over the next 12 months, even as some challenges persist.

The PMI report is based on responses from purchasing managers across Nigeria’s private sector and is widely viewed by analysts as an early indicator of economic performance. A reading above 50 indicates expansion in business activity compared with the previous month, while a number below that mark signals contraction.

The February rebound marks a clear turnaround from January’s subdued performance, pointing to renewed resilience in the private sector as firms respond to improving demand conditions after early-year weakness.