BUSINESS activity in Nigeria’s private sector slowed further in June as output levels hit a seven-month low.

This is according to the latest Purchasing Managers’ Index (PMI) report by Stanbic IBTC Bank released on Monday, June 1.

It showed the rates of expansion in output, new business, and inventories eased from May, except for the employment level.

The ICIR reports that Stanbic IBTC uses the PMI monthly report to gauge the health of the manufacturing and services sectors, reflecting on trends in new business, output, inventories, and employment.

The report showed that the Nigerian private sector remained in growth territory as the first half of 2025 ended, and that business
confidence improved markedly in June.

However, business activity slowed to 51.6 points in June from 52.7 in May and was the lowest in the current growth sequence.

Notably, a PMI above 50.0 points signals growth and below 50.0 points to contraction in business activity, which is an unhealthy condition for businesses.

“The rate of output growth eased particularly sharply, slowing for the second month running to a seven-month low.

“Sector data indicated that the slowdown in the pace of expansion reflected a fall in manufacturing production as activity continued to rise elsewhere,” Stanbic IBTC stated.

The report indicated that where output rose among businesses in the service sector, respondents linked it to higher new business and the securing of new customers.

“Indeed, new business increased solidly in June, albeit here too the pace of expansion slowed and was at a five-month low,” it explained.

Despite the pace of inflation easing to a 25-month low of 22.97 per cent in May, the Stanbic IBTC report indicated that the cost of purchase increased in June.

Data from the National Bureau of Statistics (NBS) has shown a sharp drop in the inflation rates since the rebasing of the consumer price index earlier this year, but the prices of goods and services have yet to mirror that reality.

The Stanbic IBTC report noted that supplies were hampered in June, which some firms blamed on poor road conditions, as many roads in the country are notably in bad condition.

Commenting, the Head of Equity Research West Africa at Stanbic IBTC Bank, Muyiwa Oni, said, noted that business conditions remain in the expansionary territory but the pace of expansion slowed for the third consecutive month after peaking in March.

“Manufacturing posted the fastest increase in output prices of the four broad sectors covered by the report.

“The employment level was broadly stable in June as companies that took on extra staff often did so to try to keep on top of workloads,” Oni said.

He believes that, given that inflation is expected to remain softer compared to the 2024 average, interest rates are likely to be lower this year and next.

“We expect a 150/200 basis points (bps) rate cut in 2025 and a 200/250 (bps) rate cut in 2026,” he said.

In addition to other policy measures, Oni added that the Stanbic IBTC still maintains its expectation that the Nigerian economy is likely to grow by 3.5 per cent year-on-year in real terms in 2025, but post-GDP rebasing may amplify this growth to 4.2 per cent year-on-year.