Nigeria’s economy on recovery path as PMI

By Chinwendu Obienyi

Nigeria’s economic outlook appears to be on a path of gradual recovery as the Central Bank of Nigeria (CBN) reported a steady improvement in the country’s Purchasing Managers’ Index (PMI), which rose to 52.3 index points in March 2025, up from 51.4 index points recorded in February.

The rise signals the third consecutive month of economic expansion and reflects a growing business confidence and resilience across key sectors. Though the CBN’s PMI slightly differs from Stanbic IBTC’s reported figure of 54.3 for the same period, both indicators suggest sustained positive momentum.

According to the CBN, the growth is broad-based, with all major sectors, industry, services, and agriculture, recording expansion.

“The composite PMI for March 2025, at 52.3 index points, indicates expansion in economic activities for the third consecutive month,” the CBN said in its report.

Breaking down the figures, the industry and services sectors each posted a PMI of 51.5 points, signaling stable growth in both areas. Agriculture emerged as the best-performing sector, recording a robust PMI of 54.7 points, an indication of strong momentum in the nation’s agribusiness space.

In addition to sector-wide expansion, key sub-indices also showed encouraging trends. The output index rose to 52.8 points, reflecting increased production levels, while the new orders index stood at 52.2 points, suggesting a rise in consumer and business demand.

Of the 36 sub-sectors monitored by the CBN, 24 reported growth in economic activity. Forestry led as the fastest-growing sub-sector, while 12 sub-sectors contracted, with non-metallic mineral products experiencing the sharpest decline.

Employment also showed signs of improvement, with the employment index rising to 51.7 points, indicating a modest yet sustained increase in job creation across sectors.

Commenting on the development, economic analysts said the latest PMI reading underscores continued momentum in business activity, buoyed by rising demand and renewed investment.

“The latest PMI reading of 52.3 points reinforces a growing sense of resilience and optimism within Nigeria’s private sector, despite ongoing economic challenges.

Businesses are showing strong confidence in the economy, reflected in steady expansion, increased hiring, and higher stockpiling of inventories,” they said.

They further noted that consistent improvements in employment over the past three months suggest that businesses are not only responding to immediate demand but are also positioning for long-term growth.

While the positive PMI trend points toward a gradual recovery supported by rising demand, investment, and job creation, analysts cautioned that inflationary pressures, particularly in the Industry and Services sectors, remain a concern and could affect future profitability and consumer purchasing power.