CBN Nigeria’s Private Sector Records Fifth Consecutive Month of Growth Despite Rising Production Costs

The CBN report showed that agriculture emerged as the strongest-performing sector in October, with its PMI rising to 54.7 points from 53.1 points in September.

This marked the sector’s 27th consecutive month of expansion, reflecting sustained improvements in agricultural activities.

All five agricultural subsectors monitored recorded growth during the review period.

The industrial sector also strengthened its performance, with its PMI increasing to 52.6 points from 52.0 points in September.

This represented the industry’s third consecutive month of expansion.

Of the 16 industrial subsectors surveyed, 12 recorded growth, while four experienced contraction.

The cement manufacturing subsector recorded the strongest performance, with a PMI reading of 60.2 points. However, chemical and pharmaceutical products recorded the weakest performance at 43.4 points, indicating continued contraction.

The improvement in agriculture and industry helped offset the slower pace of growth recorded in the services sector.

Services Sector Records Slower Growth

Although the services sector remained in expansion territory, its performance moderated slightly in October.

The Services PMI declined to 52.7 points from 53.2 points in September, marking its fourth consecutive month of expansion.

Seven of the 11 services subsectors surveyed recorded growth, while four contracted.

Educational services emerged as the strongest-performing subsector, recording 60.2 points.

In contrast, arts, entertainment and recreation recorded 47.1 points, placing it below the 50-point threshold.

Despite the slowdown, the services sector continued to benefit from improvements in business activity, employment, new orders and inventories.

The figures suggest that the sector remained resilient, although the moderation indicates that its growth momentum weakened compared with the previous month.

Employment Improves as New Orders Moderate

One of the notable developments in the October report was the improvement in employment conditions across the private sector.

The composite employment index increased to 53.2 points from 51.5 points in September.

The improvement indicates that more businesses reported increased employment activity during the review period.

The composite output index also increased to 54.6 points from 53.9 points, reflecting stronger production and business activity.

However, the new orders index declined to 52.8 points from 53.7 points in September.

Although it remained above the 50-point benchmark, the decline suggests that the pace of new business orders slowed during the month.

New orders are particularly important because they provide an indication of future production requirements and business demand.

The stock of raw materials index also moderated to 51.9 points from 52.1 points.

Meanwhile, new export orders improved from 48.2 points to 48.8 points, while new import orders increased from 47.9 points to 49.0 points.

Both indicators remained below 50 points, suggesting that trade-related business activity continued to face challenges.

These figures show that while domestic business conditions improved, external demand and import-related activity remained relatively weak.

Rising Production Costs Remain a Major Challenge

Despite the improvement in business activity, the CBN report highlighted persistent cost pressures affecting businesses across the economy.

The composite input price index increased to 64.0 points in October from 63.3 points in September, representing an increase of 0.7 points.

Similarly, the output price index rose to 58.9 points from 58.4 points.

The increase in input prices indicates that businesses continued to experience higher costs for materials and other production inputs.

These pressures could affect profit margins, particularly for manufacturers and agricultural businesses that depend on regular supplies of raw materials, energy and transportation services.

The report also showed differences in price movements across the major sectors.

In agriculture, the input price index increased to 68.3 points from 65.8 points, while the output price index rose to 61.1 points from 58.5 points.

In services, the input price index increased to 62.8 points from 62.0 points. However, the output price index declined to 58.4 points from 59.3 points.

The industry sector recorded a decline in input prices but an increase in output prices.

These developments suggest that businesses continued to face varying cost conditions depending on their sectors.

For consumers, sustained increases in business costs could eventually translate into higher prices for goods and services if companies pass additional expenses on to customers.

CBN Survey Shows Broad-Based Economic Improvement

The October PMI survey covered 1,851 responses from purchasing and supply executives across Nigeria’s industry, services and agriculture sectors.

Of the 32 subsectors monitored, 24 recorded expansion, while eight experienced contraction.

This indicates that the improvement in business conditions was relatively widespread rather than concentrated in only a few industries.

The CBN explained that a PMI reading above 50 points indicates expansion, while a reading below 50 points signals contraction. A reading of exactly 50 points represents no change.

It is important to note that the PMI measures the direction of changes in business activity and is not a direct measure of the percentage growth in Nigeria’s Gross Domestic Product.

The October results nevertheless provide an indication of how businesses are experiencing current economic conditions.

Outlook for Nigeria’s Private Sector

Nigeria’s fifth consecutive month of private-sector expansion represents a positive development for the country’s economic outlook.

Stronger performances in agriculture and industry, alongside improved employment and output indices, suggest that businesses are maintaining their operational activities despite persistent cost pressures.

However, the decline in new orders indicates that companies may need to remain cautious about future demand.

The continued increase in input prices also presents a challenge, particularly for businesses struggling with production expenses and the cost of maintaining operations.

For the Federal Government and the CBN, sustaining this growth momentum will require policies that support price stability, improve access to financing, strengthen infrastructure and encourage private-sector investment.

The performance of agriculture and industry will also remain important to Nigeria’s efforts to expand domestic production, create employment and reduce dependence on imported goods.

Overall, the October 2026 PMI report presents a mixed but encouraging picture of Nigeria’s private sector, with business activity continuing to expand even as rising production costs remain a significant concern.

Key Figures at a Glance