Business confidence in Nigeria rose to its highest level in 14 months in March, according to data from Stanbic IBTC’s Purchasing Managers’ Index (PMI) released on Tuesday.
The headline index increased to 54.3 from 53.7 in February, representing the fourth consecutive month of expansion.
The report attributed the improvement to the surge in new orders due to better than expected domestic demand across manufacturing, trade, real estate and other key sectors.
A PMI reading above 50.0 indicates growth while readings below signify contraction.
Stanbic IBTC noted that input cost inflation softened to its lowest point since May 2023.
This contributed to slower increases in output prices and allowed businesses to accumulate inventories ahead of expected cost stability.
Nigeria’s inflation rate eased to 23.18% in February from 24.48% recorded in January, according to the National Bureau of Statistics (NBS).
Core inflation declined to 23.01%, compared to 25.13% recorded in January.
The report confirmed that easing inflationary pressures supported an improvement in business conditions and has led to a stronger output and sustained expansion.
New job creation also rose to its highest level in seven months. However, the report indicated that most of the hiring was on a temporary or contract basis.
Stanbic IBTC revealed that firms remain cautiously optimistic as softer price pressures combined with rising demand continued to strengthen private sector activity.
The latest PMI results point to a gradual recovery of Nigeria’s private sector despite the risk of uncertainties, exchange rate volatility, elevated borrowing costs and fragile consumer spending.
