Nigeria’s private sector slipped into contraction in January 2026 as the Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) fell to 49.7, dropping decisively below the 50.0 no-change threshold for the first time in fourteen months.
The decline from December’s 53.5 represents the first contractionary reading since the survey began in 2014 for the month of January, signaling a deterioration in business conditions at the start of the year.
Okay News reports that the headline figure is compiled by S&P Global and endorsed by the National Bureau of Statistics (NBS), Nigeria’s official statistics agency. The contraction was primarily driven by a broad stagnation in new orders, which ended a prolonged sequence of growth, although sectors like agriculture and manufacturing continued to expand while weakness was concentrated in wholesale and retail trade.
Despite the softer demand, employment continued to rise slightly for the eighth consecutive month, allowing companies to reduce their backlog of work for the first time in three months. However, firms faced intensified cost pressures from higher raw material prices, with staff costs also rising at the fastest pace since July 2025 as companies adjusted wages.
These increased input costs led to a rise in selling price inflation, which accelerated to a four-month high. Business sentiment for the year ahead remained positive but weakened during the month, with firms linking optimism to planned expansions rather than current conditions, highlighting a challenging start to 2026 after over a year of consistent private sector growth.
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