PMI Drop Shows Consumers Are Struggling, Not Businesses

New data from Stanbic IBTC Bank and S&P Global shows that Nigeria’s private sector started 2026 with a significant slowdown in activity. The headline Purchasing Managers’ Index (PMI), a key measure of business status, fell to 49.7 in January.

This is a sharp drop from 53.5 in December 2025, marking a contraction for the first time since the survey began in 2014.

However, a closer look suggests that this decline reflects consumer strain rather than a widespread business collapse.

What Is PMI and Why It Matters

The PMI is based on surveys of purchasing managers in the private sector. A reading above 50 indicates growth from month to month, while below 50 indicates contraction.

It often serves as an early indicator of economic health since it highlights trends in new orders, output, employment, and prices.

• January 2026 PMI: 49.7
• December 2025 PMI: 53.5
• Threshold for growth vs contraction: 50

PMI Dips as New Orders Stall After Festive Peak

The Stanbic IBTC Bank report states that the main factor pulling the PMI below 50 was stagnating new orders. After a long stretch of strong performance, 13 months above 50, businesses reported few new orders in January.

This is typical after the peak festive spending in December. Commenting on the figures, Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, said:

“After 13 months of consecutive readings above the 50‑point no‑change mark, Nigeria’s private sector activity deteriorated to 49.7 points in January from 53.5 in December. This is as new orders stagnated following a 14‑month sequence of growth, likely linked to the weak demand that usually occurs at the start of the year after the festive‑induced spending in December of the prior year.”

Historical PMI data shows January numbers are often lower than those in December. However, this is the first time the index has fallen below 50 in January since 2014.

Sector Performance Varies

The data breakdown shows uneven performance across the economy:

• Wholesale & Retail Trade: Contracted significantly and was the weakest segment in January.
• Agriculture, Manufacturing & Services: Continued to grow, remaining above the 50 mark.

This uneven performance suggests that while consumers may be reluctant to spend, many businesses and service providers are still operating and even growing.