…CBN PMI rises to 53.2 points as employment and output strengthen, but slowing new orders and rising cost pressures signal emerging challenges for businesses
THUR NOV 05 2026-theGBJournal| Nigeria’s private sector extended its expansion for a fifth consecutive month in October, supported by stronger agricultural and industrial activity, although weakening new orders and mounting cost pressures suggest that the recovery remains uneven.
The Central Bank of Nigeria’s (CBN) October 2026 Purchasing Managers’ Index (PMI) report showed that the composite PMI increased to 53.2 points from 53.0 points in September, indicating a marginal improvement in overall business conditions.
The latest reading keeps the index above the critical 50-point threshold separating expansion from contraction, signalling continued growth in private-sector economic activity.
However, the improvement was largely driven by agriculture and industry, while the services sector recorded a moderation in growth.
The report showed that 24 of the 32 subsectors surveyed expanded during the month, while eight contracted, highlighting the broadening, but uneven, nature of Nigeria’s private-sector recovery.
Agriculture recorded the strongest performance among the three major sectors, with its PMI rising significantly to 54.7 points in October from 53.1 points in September.
The sector maintained its expansion for the 27th consecutive month, with all five agricultural subsectors recording growth.
General farming activities strengthened to 56.8 points from 54.6 points, while new orders increased to 55.6 points from 54.4 points.
Employment improved to 52.9 points from 51.4 points, while raw materials inventories climbed to 53.6 points from 52.1 points.
Livestock was the best-performing agricultural subsector, recording a PMI of 56.4 points, followed by forestry at 55.3 points.
Agricultural Support Services recorded the lowest reading at 52.0 points, although it remained firmly in expansion territory.
The agricultural sector’s performance suggests improving production conditions and stronger demand across farming-related activities.
However, rising agricultural input prices could complicate the sector’s ability to sustain growth without passing additional costs to consumers.
Industrial activity also improved, with the Industry PMI increasing to 52.6 points in October from 52.0 points in September.
This represented the sector’s third consecutive month of expansion.
Twelve of the 16 industrial subsectors surveyed recorded growth, while four contracted.
Industrial output increased to 53.5 points from 53.2 points, while new orders rose to 52.1 points from 51.7 points.
The employment index strengthened to 52.7 points from 51.1 points, while raw materials inventories increased to 51.8 points from 51.1 points.
The cement subsector emerged as the strongest industrial performer, recording 60.2 points.
However, Chemical and Pharmaceutical Products remained the weakest subsector across the entire survey, with a PMI of 43.4 points, indicating continued contraction.
Unlike agriculture and industry, the services sector recorded a moderation in business activity.
Its PMI declined to 52.7 points in October from 53.2 points in September, although it remained above the 50-point expansion threshold for the fourth consecutive month.
Seven of the 11 services subsectors expanded, while four contracted.
Business activity increased marginally to 54.2 points from 54.0 points, while employment improved to 53.5 points from 51.7 points.
However, new orders declined to 51.7 points from 54.5 points, while inventories fell to 51.1 points from 52.6 points.
Educational Services was the strongest-performing services subsector, recording 60.2 points.
Arts, Entertainment and Recreation was the weakest, with a reading of 47.1 points, indicating contraction.
A closer examination of the composite indicators reveals an important development in the October survey: businesses increased production and employment, but incoming orders weakened.
The composite output index increased to 54.6 points from 53.9 points in September, indicating stronger production and business activity.
The employment index also climbed to 53.2 points from 51.5 points, suggesting improved hiring conditions across the private sector.
However, the new orders index declined to 52.8 points from 53.7 points.
Although still above the expansion threshold, the decline indicates that the pace of incoming business orders moderated.
The stock of raw materials index also slipped to 51.9 points from 52.1 points.
Meanwhile, the suppliers’ delivery time index stood at 52.6 points, indicating faster supplier deliveries.
The combination of stronger output and employment with weaker new orders presents a mixed picture.
Businesses appear to have increased production and staffing during October, but the slowdown in new orders raises questions about the sustainability of that momentum if demand continues to weaken.
Despite the improvement in economic activity, the October PMI report highlighted persistent price pressures across the private sector.
The composite input price index increased by 0.7 points to 64.0 points from 63.3 points in September.
The output price index also rose by 0.5 points to 58.9 points from 58.4 points.
The increase in both indices suggests that more businesses continued to report rising costs of materials and other production inputs, with some passing higher costs on to customers.
Agriculture recorded particularly strong price pressures.
Its input price index climbed to 68.3 points from 65.8 points, while its output price index increased to 61.1 points from 58.5 points.
In the services sector, the input price index rose to 62.8 points from 62.0 points. However, its output price index declined to 58.4 points from 59.3 points.
Industry recorded a different pattern, with its input price index easing to 62.4 points from 63.5 points, while its output price index increased to 58.0 points from 56.7 points.
This divergence suggests that cost pressures were not uniform across the economy.
Agricultural businesses experienced stronger increases in both input and selling-price indices, while industrial businesses reported some easing in input-price pressures.
For the broader economy, the concern is that persistent input-cost increases could constrain profit margins, weaken investment appetite and eventually translate into higher consumer prices.
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