Nigeria Growth Momentum Begins to Shift, 19 Subsectors Contrast
Nigeria’s purchasing manager index (PMI) reading for April indicates a shift in economic growth momentum, with 19 subsectors showing signs of decline, as noted in a recent review by Cowry Asset Limited.
The April PMI suggests the economy is transitioning from steady expansion to slower growth, with broad decline across key indicators—particularly in new orders, output, and employment—reflecting weakening demand conditions, especially within the Services sector.
While Agriculture continues to hold steady and provide some support, there are early indications of moderation in that sector as well, analysts said in the commentary note.
The firm said this observation will be crucial, as the PMI readings for May and June will help determine whether the current slowdown is temporary or the beginning of a prolonged downturn.
In practical terms, this cautious outlook implies that softer growth could lead investors to favour fixed-income instruments, while the equities market may show a clearer distinction between defensive and more cyclical stocks, according to Cowry Asset Limited.
Analysts have also pointed out that ongoing price pressures complicate the policy landscape. In April 2026, Nigeria’s economic activity showed noticeable moderation, with the Composite Purchasing Managers’ Index (PMI) declining to 49.4 points, the first time below the 50-point threshold in 16 months.
Although this marks a technical contraction, the data indicates a gradual loss of growth momentum rather than a sharp downturn. The primary drivers of this shift are largely demand-related.
New orders fell to 48.4 points, and output moderated to 49.7 points, both reflecting reduced business activity and softer consumer demand. This cooling trend extended to the labour market, where employment declined to 49.6 points, indicating a more cautious hiring approach by firms.
Furthermore, businesses reduced inventory accumulation, with the Stock of Raw Materials Index at 48.7 points, signifying more defensive operational and financial decisions.
However, an area of relative stability was observed in supply chain performance, with the Suppliers’ Delivery Time Index improving to 50.9 points, pointing to more efficient delivery timelines.
Analysts at Cowry Asset Limited noted that this improvement seems to stem more from reduced pressure on supply systems than from stronger demand conditions.
The slowdown was most apparent in the Industry and Services sectors. The Industry PMI registered at 49.5 points, indicating a slight contraction. Although output remained marginally expansive at 50.2 points, this reflects continued production rather than increased demand.
Supporting this perspective, both new orders (49.5 points) and employment (48.7 points) declined, while the Raw Materials Inventory Index fell further to 46.8 points, highlighting a further decline in manufacturing activity.
The Services sector recorded a PMI of 48.8 points, marking its first contraction after 14 consecutive months of expansion. This broad-based slowdown included Business Activity at 49.2 points, New Orders at 47.5 points, Employment at 49.0 points, and Inventories at 49.5 points.
The decline in transportation and warehousing indicates moderating trade and logistics activity, underscoring the growing demand-side pressures. In contrast, the Agriculture sector remained in expansionary territory at 50.2 points, extending its growth streak to 21 consecutive months.
This resilience was supported by relatively robust employment (52.1 points) and general farming activities (50.5 points). However, declines in new orders and raw material stocks within the sector suggest that even this area of strength may encounter challenges if overall economic conditions remain subdued.
Looking at the broader economy, activity levels showed a slight negative tilt. Out of 36 subsectors surveyed, 16 recorded expansion, 19 contracted, and 1 remained unchanged.
Forestry achieved the strongest growth, while primary metals experienced the steepest decline, reflecting weaker industrial demand.
Price developments remained firm during this period, with both input and output price indices rising by 3.2 points in April.
Notably, in the Industry and Agriculture sectors, output prices increased faster than input costs, suggesting that firms still retain the ability to pass on rising costs as a strategy to maintain margins in a slowing economic environment.
