Nigeria’s private sector closed 2025 solidly in expansion territory as increased festive season demand pushed business activity to a 13-month high, according to the latest Stanbic IBTC Purchasing Managers’ Index.

The headline PMI stood at 53.5 in December, slightly lower than the 53.6 recorded in November, but remained firmly above the 50.0 benchmark that separates expansion from contraction.

According to the survey, the December reading indicated a monthly improvement in business conditions and marked the thirteenth consecutive month of expansion, broadly consistent with the average performance recorded throughout 2025.

“The December expansion was driven largely by stronger customer demand, which translated into a marked increase in new orders. Sales growth extended to a fourteenth straight month, easing only slightly from November’s pace,” the report stated.

In response to rising workloads, firms expanded output sharply, with growth broadly matching the level recorded in the previous month.

All four broad sectors covered by the survey reported higher output levels during the period, with the agriculture sector leading the expansion.

The survey noted that improved demand conditions also prompted companies to increase purchasing activity and raise inventory holdings.

Employment levels rose again in December, although the pace of job creation was marginal and represented the weakest increase recorded since June 2025.

The report further showed that business confidence strengthened sharply at the end of the year, rising to a six-month high.

Nearly 59 percent of respondents expressed optimism about future activity, supported by plans to invest in expanding operations, opening new branches and increasing export capacity.

Commenting on the report, Muyiwa Oni, Head of Equity Research for West Africa at Stanbic IBTC Bank, said the December PMI reading moderated for the second consecutive month but remained firmly in growth territory and broadly aligned with the average performance for 2025.

He explained that the sustained expansion reflected stronger customer demand, which supported growth in new orders and encouraged firms to step up purchasing activity and build inventory levels.

Oni added that although input prices increased sharply in December from a near five-year low recorded in November, inflation remained weaker than the 2025 average.

He attributed the increase partly to higher festive-season spending and projected monthly inflation of 1.44 percent in December, implying a headline inflation rate of 32.34 percent on a year-on-year basis.

Looking ahead, Stanbic IBTC expects Nigeria’s economy to grow by 3.8 percent year-on-year in 2025 and accelerate further to 4.1 percent in 2026.

The growth outlook is expected to be supported by stronger manufacturing and services activity, infrastructure development, improved trade conditions and the forward-linkage effects of the Dangote refinery.

“Lower interest rates, exchange rate stabilisation and broader sectoral contributions are expected to further support private consumption, investment, and overall economic growth in 2026,” he said.