Private Sector Activity Expands As PMI Indicates Broad Economic Momentum

By Olumide Johnson

• Nigeria’s PMI hits 56.4 Points, Signaling Sustained Economic Drive

The Central Bank of Nigeria (CBN) has reported continued expansion in private sector economic activity, with the Purchasing Managers’ Index (PMI) rising to 56.4 points in February 2026, indicating sustained growth across the economy.

The index shows that business activity expanded for the fifteenth consecutive month, reflecting improvements across the industry, services and agriculture sectors.

According to the survey, the industry sector PMI stood at 56.8 points, the services sector at 55.3 points, while the agriculture sector recorded 56.5 points, all indicating expansionary conditions above the 50-point growth threshold.

The CBN noted that expansion occurred across most segments of the economy, with 30 of the 36 subsectors surveyed reporting increased activity during the review period.

DECISION HIGHLIGHT

The Purchasing Managers’ Index data suggests that Nigeria’s real economy is experiencing broad-based operational expansion, despite persistent macroeconomic pressures.

The index reflects improved production output, stronger new orders and moderate employment growth across the three major sectors of the economy.

DECISION MEMO

The February 2026 PMI published by the CBN offers one of the clearest real-time indicators of private sector momentum in the Nigerian economy.

Unlike conventional macroeconomic statistics that often lag economic activity, the PMI captures operational changes within businesses by surveying procurement executives responsible for supply chains, production planning and inventory management.

In February 2026, the composite index rose to 56.4 points, comfortably above the 50-point threshold that signals expansion in business activity.

The sustained expansion marks the fifteenth consecutive month of growth, suggesting that private sector firms continue to expand operations despite inflationary pressures, exchange rate volatility and structural infrastructure challenges.

The industry sector, with a PMI of 56.8 points, recorded the strongest expansion among the three sectors. Improvements were observed in production output, new orders and employment levels, indicating rising industrial activity and stronger demand conditions.

Similarly, the services sector PMI of 55.3 points extended its expansion streak to thirteen consecutive months, reflecting increased business activity across service-based industries.

Within the services segment, most subsectors recorded growth, with only Professional, Scientific and Technical Services reporting contraction during the review period.

The agriculture sector, often viewed as a stabilising component of Nigeria’s economic structure, also maintained expansionary momentum. The sector recorded a PMI of 56.5 points, marking nineteen consecutive months of growth.

Agricultural activity was driven primarily by stronger general farming operations, new orders and inventory levels, while forestry activities recorded contraction.

Beyond sectoral expansion, the report also reveals underlying cost pressures. Input prices across the three sectors increased at a faster pace than output prices, indicating that businesses continue to face rising production costs.

This divergence between input and output price indices suggests that firms may still be absorbing part of the cost increases rather than fully passing them to consumers.

The PMI therefore presents a mixed picture. Operational activity is expanding across most industries, yet underlying cost dynamics remain elevated.

DATA BOX

Composite Purchasing Managers’ Index (February 2026): 56.4

Industry Sector PMI: 56.8

Services Sector PMI: 55.3

Agriculture Sector PMI: 56.5

Subsectors Covered: 36

Subsectors Reporting Expansion: 30

Growth Threshold:
Index above 50 points indicates expansion in business activity.

WHO WINS / WHO LOSES

Winners

Industrial producers and agricultural operators benefit from stronger production activity and increasing new orders.

Service sector businesses also gain from sustained growth in demand for operational and commercial services.

Losers

Subsectors experiencing contraction, particularly primary metals and forestry, face weaker demand or operational constraints.

Businesses operating with thin margins may also struggle with rising input costs.

POLICY SIGNALS

The PMI suggests that Nigeria’s economic reforms and macroeconomic adjustments may be gradually stabilising private sector activity.

However, the continued rise in input prices signals that inflationary pressures remain embedded within supply chains.

Policy attention may therefore remain focused on improving supply logistics, stabilising exchange rates and reducing production costs.

INVESTOR SIGNAL

For investors, the PMI data provides evidence that economic activity is expanding across multiple sectors, particularly industry and agriculture.

Sustained growth in new orders and production output suggests improving business confidence and operational expansion in the first quarter of 2026.

However, cost pressures remain a factor that could influence corporate profitability.

RISK RADAR

Three structural risks remain visible.

First is cost inflation risk, as input prices continue to rise faster than output prices.

Second is sectoral imbalance risk, where certain subsectors continue to experience contraction despite overall expansion.

Third is supply chain vulnerability, particularly in industries dependent on imported raw materials.

The PMI ultimately signals that Nigeria’s economy is expanding at the operational level, but the sustainability of that momentum will depend on how effectively businesses and policymakers manage underlying cost pressures and structural constraints.