Nigeria’s economic activity strengthened marginally in October, extending the country’s expansion for a fifth consecutive month, but rising input costs and uneven sectoral performance continue to raise questions about the sustainability and wider benefits of the recovery.
The Central Bank of Nigeria’s October 2026 Purchasing Managers’ Index (PMI) report showed that the composite PMI increased to 53.2 points from 53.0 points in September, indicating continued expansion in private-sector business activity.
However, the improvement came alongside an increase in business costs, with the composite input price index rising to 64.0 points, while the output price index stood at 58.9 points.
The figures highlight a growing tension in the economy: businesses are recording increased activity, but the cost of acquiring the inputs needed to sustain production and service delivery remains elevated.
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The rising cost pressures could further complicate efforts to translate economic expansion into improved consumer welfare, particularly if businesses continue to transfer higher operating expenses to customers through increased prices.
The October report also revealed that the recovery remains uneven across the economy, despite improvements in the overall business environment.
Of the 32 subsectors covered by the CBN survey, 24 recorded expansions, while eight remained in contraction territory. This suggests that the improvement in aggregate economic activity has yet to reach several important segments of the private sector.
Among the subsectors experiencing contraction were chemical and pharmaceutical products, with a PMI of 43.4 points, transportation, courier and storage at 47.6 points, telecommunications and information services at 48.2 points, and real estate at 49.2 points.
Textile, apparel and footwear also remained in contraction at 45.8 points, alongside arts, entertainment and recreation at 47.1 points.
The performance of these sectors raises questions about the structural challenges confronting businesses, including operating expenses, infrastructure constraints, financing conditions and the strength of consumer demand.
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Agriculture, however, emerged as the strongest-performing of the three broad sectors monitored by the CBN, with its PMI rising to 54.7 points in October from 53.1 points in September.
All five agricultural subsectors recorded expansion, indicating an improvement in business activity across the sector.
Yet, the agricultural input price index stood at 68.3 points, while the output price index reached 61.1 points, reflecting continued cost and pricing pressures within the sector.
The figures suggest that increased agricultural activity is occurring alongside elevated input costs, an important consideration for food production and affordability.
In the industrial sector, the PMI increased to 52.6 points from 52.0 points, while the services sector slowed slightly to 52.7 points from 53.2 points, although both remained in expansion territory.
The manufacturing subsector data also revealed significant differences in performance across industries.
Cement recorded a sharp improvement, with its PMI rising from 50.2 points in September to 60.2 points in October. Motor vehicles and assembly also moved from contraction at 44.6 points to expansion at 55.8 points.
Oil refining improved to 56.5 points from 52.5 points, while wood products rose to 59.5 points from 55.5 points.
However, the improvement was not universal. Chemical and pharmaceutical products declined to 43.4 points from 43.9 points, while textiles and apparel fell to 45.8 points from 49.7 points.
The services sector also presented a mixed picture. Finance and insurance recorded a PMI of 57.1 points, while educational services reached 60.2 points. In contrast, transportation and telecommunications remained in contraction.
Meanwhile, the composite output index stood at 54.6 points, above the new orders index of 52.8 points, while the employment index reached 53.2 points.
Although these readings indicate continued expansion in output, new orders and employment, the differences between the indicators raise questions about the strength and sustainability of demand across businesses.
Overall, the October PMI report points to an economy maintaining its expansionary momentum but still facing significant cost pressures and uneven sectoral recovery.
The marginal increase in the composite index is encouraging, but the elevated input price index and continued contraction in several subsectors suggest that the improvement in business activity has not eliminated the challenges confronting the private sector.
For policymakers, the figures underscore the importance of addressing the cost of production, improving the business environment and ensuring that economic expansion translates into stronger productive activity across more sectors.
Ultimately, the strength of Nigeria’s recovery will depend not only on how many businesses report expansion, but also on whether they can sustain production, manage operating costs and create an environment in which consumers and businesses can benefit from improved economic activity.
Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.
