Private Sector Sees Strongest Job Growth in 23 Months

Nigeria’s Private Sector Shows Strong Job Creation in Q3

Nigeria’s private sector has demonstrated a significant increase in job creation, marking the strongest pace in nearly two years as the third quarter came to an end. This development was highlighted in the latest Stanbic IBTC Purchasing Managers’ Index (PMI), which was released on Wednesday.

The PMI data revealed that the robust job creation was driven by sustained growth in output and new orders. The rise in business confidence, fueled by decreasing inflationary pressures, led companies to expand their workforce to meet increasing demand. Additionally, it was noted that firms experienced a slower rate of increase in purchase costs, the slowest in five and a half years.

The monthly report indicated that the Nigerian private sector continued to operate within growth territory at the conclusion of the third quarter. The headline PMI remained above the 50.0 no-change mark for the tenth consecutive month in September, signaling a consistent improvement in the health of the private sector.

Although the PMI slightly declined to 53.4 from 54.2 points in August, it still reflected a solid strengthening of business conditions. New business increased significantly in September, supported by improvements in customer demand and the introduction of new products. However, the rate of growth slowed to a three-month low. The rise in new orders contributed to a sharp expansion of business activity, with increases observed across all four sectors covered by the report.

“Higher output requirements prompted firms to expand their operating capacity in September, with both employment and purchasing activity rising. Staffing levels increased modestly but at the sharpest pace since October 2023. Meanwhile, the rate of growth in input buying remained sharp and contributed to an accumulation of inventories,” the report stated.

Muyiwa Oni, the Head of Equity Research West Africa at Stanbic IBTC Bank, commented on the report, stating, “Nigeria’s business conditions ended the quarter on a strong note, although the pace of strengthening moderated compared to August. Specifically, the headline PMI settled at 53.4 points in September, down from 54.2 in August. Notably, the rate of expansion in output (56.1 points vs. August: 56.8 points) remained strong despite a slight decline when compared to August, linked to improving customer demand and better availability of materials, which enabled firms to boost activity.”

“Based on this, businesses were able to launch new products, thereby supporting an increase in new orders (55.4 points vs. August: 58.3 points), which remained above the 50-point growth threshold for the 11th consecutive month even as the rate of growth eased to a three-month low.”

Oni further noted that the Nigerian economy grew by 4.23 per cent year-on-year in Q2:25, up from 3.13 per cent year-on-year in Q1:25. This brought the real GDP growth for H1:25 to 3.69 per cent year-on-year, compared to a revised average of 2.88 per cent year-on-year in H1:24. He emphasized that the non-oil sector’s growth is expected to remain strong into 2026, supported by likely reductions in interest rates and low inflation, which should boost aggregate demand and private investment.

“Further, a likely lessening in exchange rate volatility in 2025 and 2026 based on our current estimates should support growth across trade, manufacturing, real estate, and construction. The PMI over Q3:25 and crude oil production in the period suggest the oil and non-oil sectors may grow by 14.3 per cent year-on-year and 4.4 per cent year-on-year, respectively, translating into overall GDP growth of 4.5 per cent year-on-year in Q3:25. We now lift our 2025 growth forecast to 4.0 per cent year-on-year, from 3.5 per cent year-on-year, after fully accounting for the impact of GDP rebasing and after surprisingly good Q2:25 GDP growth.”

Key Highlights from the Report

• Job Creation: The private sector recorded its strongest job creation pace in almost two years during Q3.
• PMI Performance: The headline PMI remained above the 50.0 mark for the tenth month in a row, indicating sustained growth.
• Output Growth: Output growth remained strong despite a slight decline compared to August.
• New Orders: New orders increased significantly, driven by improved customer demand and new product launches.
• Inflation and Interest Rates: Easing inflationary pressures and potential interest rate cuts are expected to support future economic growth.
• Sectoral Growth: Both the oil and non-oil sectors are projected to experience growth, contributing to overall GDP expansion.