Nigeria’s private sector showed signs of strain in April 2026 as fresh data pointed to weakening demand, slowing business activity and mounting cost pressures across key sectors of the economy.
The latest Purchasing Managers’ Index (PMI) released by the Central Bank of Nigeria fell to 49.4, slipping below the 50-point benchmark that separates expansion from contraction. The decline ends a 16-month run of growth and signals a shift in underlying business conditions.
“The composite Purchasing Index (PMI) for April 2026 stood at 49.4 points, marginally below the 50-point threshold, indicating a slight contraction in aggregate economic activity following sixteen (16) consecutive months of expansion,” the report stated.
Demand weakens, activity slows
The contraction reflects a broad pullback in core business indicators often associated with income generation and operational performance. Output — a proxy for business income — edged down to 49.7, while new orders, a forward-looking indicator of revenue, declined more sharply to 48.4. Employment also dipped to 49.6, suggesting firms are responding cautiously to weaker demand.
Inventory levels, captured by the stock of raw materials index at 48.7, point to reduced purchasing activity and tighter working capital management — a balance sheet signal that firms are scaling back commitments amid uncertainty.
Across the 36 subsectors surveyed, 19 recorded contraction, one remained unchanged and only 16 expanded. Primary metals posted the steepest decline, while forestry led growth.
External pressures also played a role, with geopolitical tensions in the Middle East cited as a factor affecting supply chains and business confidence.
Industry and services drag performance
The downturn was most evident in the industry and services sectors, both of which slipped into contraction territory.
Industry PMI stood at 49.5. While output remained slightly positive at 50.2, new orders (49.5) and employment (48.7) weakened, indicating softer demand and restrained hiring. Raw material inventories fell sharply to 46.8, reinforcing signs of reduced production planning and tighter balance sheet positioning.
In the services sector, PMI declined further to 48.8 — its first contraction in 14 months. Business activity (49.2), new orders (47.5), employment (49.0) and inventories (49.5) all dropped, with transportation and warehousing recording the steepest declines. Educational services, however, showed relative strength.
Agriculture holds steady amid rising costs
In contrast, agriculture remained resilient, posting a PMI of 50.2 and extending its expansion streak to 21 months. Growth in general farming activity (50.5) and employment (52.1) supported the sector, although weaker new orders and inventories suggest emerging pressures.
Three of five agricultural subsectors expanded, with forestry again leading gains.
Profit margins under pressure
Price dynamics added another layer of complexity for businesses. Input and output price indices both rose by 3.2 points in April, indicating elevated cost conditions.
Notably, output prices increased faster than input costs in the industry and agriculture sectors — a sign that firms are attempting to protect profit margins by passing higher costs to consumers. However, this strategy risks further dampening demand in an already fragile environment.
Fragile outlook
The April data marks a sharp reversal from March 2026, when PMI stood at 53.2, reflecting stronger expansion. The latest figures highlight a more fragile economic landscape, where declining income indicators, tighter balance sheet positions and pressured margins are beginning to weigh on overall business performance.
With demand softening and external uncertainties persisting, the sustainability of recent growth momentum now appears increasingly uncertain for Nigeria’s private sector.