PMI: Manufacturing and Agriculture Report Higher Output Prices as Economic Activity Climbs to 54.1

Dike Onwuamaeze

The Purchasing Managers’ Index (PMI) report released by Stanbic IBTC Bank indicates that the manufacturing and agriculture sectors recorded the steepest rise in output prices during May 2026.

The PMI also shows an increase in productivity across the Nigerian private sector, with the headline index climbing to 54.1 in May from 52.4 in April.

The report notes that “Employment rose in the agriculture and services sectors, but fell in manufacturing, wholesale and retail,” while output growth was observed in all four broad sectors covered by the survey.

Higher fuel costs continued to drive sharp increases in input costs and output prices, although inflation rates softened from April.

Companies adjusted their selling prices in line with the rapid rise in input costs, with the most pronounced increases occurring in the manufacturing and agriculture categories.

It states: “The headline PMI rose to 54.1 in May from 52.4 in April, signalling a solid monthly improvement in business conditions and one that was the most pronounced since August 2025. The health of the private sector has now strengthened in four consecutive months.”

“Central to the solid improvement in business conditions were marked and accelerated expansions in both output and new orders during May. Rates of growth hit seven‑ and nine‑month highs respectively and anecdotal evidence pointed to improving customer demand and the launch of new products.”

“Improving demand, and the prospect of further growth in the months ahead, led companies to expand their purchasing activity and inventories in May. Here too, rates of expansion quickened from April and were sharp.”

The report also highlights that employment continued to rise only slightly midway through the second quarter, although sustained job creation has now been recorded each month for a year.

According to the report, increasing fuel costs, following the outbreak of war in the Middle East, have continued to drive up purchase prices in May.

It says: “Purchase costs rose rapidly again, despite the rate of inflation easing to a three‑month low. Purchase prices increased at a much quicker pace than staff costs, which rose modestly again in May.”

The PMI adds: “Overall input costs continued to increase sharply during May, although the rate of inflation eased for the second month running. Underlying data indicated that higher purchase prices were the main driver of rising overall input costs, while employee expenses increased only modestly.”

“Total input prices rose sharply across all four monitored sectors, led by manufacturing. In line with the picture for overall input costs, purchase prices increased rapidly but at the slowest pace in three months during May. Higher fuel and transportation costs were the principal factors leading to rising purchase prices, according to respondents.”

Commenting on the PMI report, Head of Equity Research West Africa at Stanbic IBTC Bank, Mr. Muyiwa Oni, said that private sector activity in Nigeria improved to its best level in nine months.

Oni said that this impressive business condition was primarily due to accelerated expansion in both output (56.6 vs April: 53.4) and new orders (57.0 vs May: 54.6) as evidence pointed to improving customer demand and the launch of new products.

However, “input prices maintained an uptrend, but the pace of increase eased for the second consecutive month. This is also reflected in higher output prices with the steepest increase seen in the manufacturing and agriculture sectors,” Oni said.

The PMI notes that Nigerian companies increased their staffing levels again in May, extending the current sequence of monthly expansion to a year.

It further reports that demand for goods and services increased in May, as has now been the case on a monthly basis throughout the past year‑and‑a‑half.

The report states that the rate of growth was marked and the fastest in 2026 so far and “anecdotal evidence suggested that input buying expanded in line with stronger customer demand and the prospect of further improvements in the months ahead.”