What the Latest PMI reveals about the Nigerian economy
The Purchasing Managers’ Index (PMI) report released by the Central Bank of Nigeria (CBN) has revealed a continued strengthening of Nigeria’s economic performance, highlighting an expansion in overall business activity during September 2025. According to the report, the composite PMI rose to 54.0 index points, up from 51.7 in August. This marks the tenth consecutive month of expansion, indicating sustained confidence and improvement in production, demand, and employment across the economy.
The report noted that this broad-based growth was driven by steady advances across the country’s three dominant sectors—Industry, Services, and Agriculture—each showing varying degrees of expansion.
In the Industry sector, the PMI recorded 51.4 index points, maintaining a positive growth trajectory. Out of the 17 industrial subsectors surveyed, 11 reported expansion, reflecting increased manufacturing activities and improved supply chain conditions despite lingering cost pressures. The report attributed the moderate improvement to better access to inputs, modest improvements in logistics, and a rise in domestic demand for manufactured goods.
The Services sector posted an even stronger performance, achieving a PMI reading of 54.7 index points, compared to its previous month’s figure. This marks the eighth consecutive month of expansion, driven by growth in 12 out of 14 subsectors, including finance, real estate, trade, and transportation. The report highlighted that business activity in the service industry benefited from enhanced consumer demand, higher spending in retail and hospitality, and gradual stabilization in the exchange rate environment, which bolstered confidence among service providers.
Meanwhile, Agriculture continued to lead the growth momentum, posting a PMI of 54.8 index points. All five agricultural subsectors recorded positive growth, marking the fourteenth consecutive month of sustained expansion. The increase was attributed to improved weather conditions, better access to fertilizers and mechanized tools under recent government initiatives, and expanding domestic and export markets for farm produce.
The CBN report also provided detailed insight into key sub-indices that contributed to the overall composite PMI for September. The Output Index rose to 54.8, showing stronger production levels; the New Orders Index increased to 53.7, reflecting growing market demand; while the Employment Index stood at 53.4, signaling continuous job creation and workforce expansion. Together, these metrics paint an encouraging picture of resilience and gradual recovery in Nigeria’s productive sectors, despite the ongoing macroeconomic challenges of inflation and exchange rate volatility.
Economists interpret the positive PMI readings as a sign of broad economic stabilization following months of policy reforms and market adjustments. A composite index above 50 typically indicates that the economy is expanding, while readings below 50 signal contraction. The September score of 54.0 suggests that businesses across sectors are not only maintaining activity but also scaling up operations in response to improving market conditions.
To sustain and build on this growth momentum, analysts and policymakers emphasize the need for targeted government interventions that support productivity and investment. The report recommends that authorities focus on stabilizing the exchange rate, simplifying business tax regimes, and ensuring affordable and reliable energy supply—factors critical for lowering production costs and fostering competitiveness. Enhancing infrastructure, providing incentives for value-added manufacturing, and strengthening credit access to small and medium enterprises will also be essential to sustaining the positive PMI trajectory.
Ultimately, the CBN’s September 2025 PMI underscores a cautiously optimistic outlook for the Nigerian economy. The data suggest that while structural challenges persist, consistent reform implementation and improved macroeconomic coordination could sustain this upward trend into the final quarter of the year, paving the way for stronger, more inclusive growth across all sectors. (Source: Central Bank of Nigeria – Purchasing Managers’ Index Report, September 2025)
