CBN, Stanbic IBTC Data Show Broader Nigerian Recovery Amid Persistent Cost Pressures

By Kingsley Ani

The Central Bank of Nigeria (CBN) reported that its Composite Purchasing Managers’ Index (PMI) rose from 51.1 points in July to 52.7 points in August 2026, sustaining expansion for a third consecutive month, with 19 of 32 subsectors growing. Separately, Stanbic IBTC’s PMI rose from 52.5 to 54.3 points, its strongest monthly improvement in more than two and a half years, with agriculture and manufacturing leading output expansion. Both surveys pointed to stronger business activity, output and new orders, although Stanbic IBTC reported faster input-cost inflation, driven by fuel, transport and raw-material costs.

DECISION HIGHLIGHT

The combined evidence points to a broadening recovery rather than a purely headline improvement, but the acceleration is occurring alongside renewed cost pressures.

DECISION MEMO

The convergence between the two PMI surveys is analytically significant. Although their headline readings differ, both point in the same direction: private-sector activity strengthened in August.

The CBN recorded 52.7 points, with services at 53.3 and agriculture at 53.4, while industry returned to expansion at 50.6 after contracting since April. Its Output, Employment and New Orders indices also remained above the 50-point threshold.

Stanbic IBTC provides a stronger reading on the intensity of the private-sector expansion. Its headline PMI reached 54.3 points, with output increasing across all four broad sectors surveyed. Agriculture and manufacturing recorded the strongest expansion, while business activity rose for a 21st successive month.

The contrast between the two surveys should not be treated as a contradiction. The more useful conclusion is that both independently identify continuing expansion, while Stanbic IBTC provides additional evidence that manufacturing and agriculture are becoming important engines of activity.

The demand side is also strengthening. Stanbic IBTC reported that new business increased for seven consecutive months, with the latest expansion jointly the strongest in more than two and a half years. The report attributed the improvement partly to new products and stronger customer demand.

Muyiwa Oni, Head of Equity Research, West Africa, at Stanbic IBTC Bank, said that firms also cited material availability as supporting growth and remained optimistic about future output, including plans to hire, export and expand geographically.

That optimism is nevertheless being tested by costs.

Oni noted: “Meanwhile, input prices maintained an uptrend on account of higher transportation costs and increase in prices of raw materials. In line with this, output prices also maintained an uptrend, with the agricultural sector seeing the biggest jump in prices.”

The food-price component is particularly important. Food inflation reached 20.31 percent year-on-year in July from 17.52 percent in June, maintaining an upward trend for a sixth consecutive month, even as headline inflation moderated to 15.43 percent.

This creates the central tension in the August data. Production is expanding, orders are strengthening and businesses are becoming more optimistic, but the cost base remains elevated. Where firms pass higher costs through to selling prices, stronger output can coexist with persistent pressure on consumers.

The CBN’s return of industry to expansion is consequently encouraging, but its 50.6 reading remains marginal. Stanbic IBTC’s stronger manufacturing signal offers some additional confidence, particularly given the expectation of favourable base effects.

Oni expects manufacturing to receive the biggest growth boost, while information and communication technology, trade, real estate, and finance and insurance are expected to remain major services-sector drivers.

DATA BOX

• 54.3 points: Stanbic IBTC August PMI, up from 52.5.
• 52.7 points: CBN August Composite PMI, up from 51.1.
• 21 months: Consecutive months of business-activity expansion in the Stanbic IBTC survey.
• 25 months: Consecutive agricultural expansion recorded by the CBN survey.
• 19 of 32: CBN-surveyed subsectors recording expansion.
• 50.6 points: CBN Industry PMI.
• 53.4 points: CBN Agriculture PMI.
• 53.3 points: CBN Services PMI.
• 20.31 percent: July food inflation, up from 17.52 percent in June.
• 15.43 percent: July headline inflation, down from 15.91 percent in June.
• Seven months: Consecutive expansion in new business in the Stanbic IBTC survey.

WHO WINS / WHO LOSES

WHO WINS: Agriculture and manufacturing are gaining momentum, while service businesses continue to provide a strong foundation for private-sector expansion.

WHO LOSES: Businesses with thin margins remain vulnerable to higher fuel, transport and raw-material costs. Consumers are also exposed where firms transfer those costs into higher prices.

POLICY SIGNALS

The data support continued attention to production capacity, input availability and the operating costs facing businesses.

The simultaneous expansion in output and persistence of cost pressures means policy effectiveness will increasingly be judged by whether supply-side improvements can outpace cost escalation.

INVESTOR SIGNAL

The strongest signal is the breadth and persistence of private-sector expansion. Manufacturing’s return to expansion in the CBN survey, combined with Stanbic IBTC’s stronger manufacturing reading, improves the outlook for productive-sector activity.

However, rising input prices remain a margin risk and could constrain the pace at which stronger demand converts into sustainable corporate earnings.

RISK RADAR

The central risk is cost-driven erosion of the recovery.

Fuel, transport and raw-material costs are rising, while food inflation remains elevated. If businesses continue passing these costs through to consumers, inflation could weaken purchasing power and eventually constrain new orders.

The August PMI evidence therefore supports a cautiously constructive interpretation: Nigeria’s private sector is expanding more broadly, but the next phase depends on whether output growth can remain ahead of the cost pressures accompanying it.