Nigeria’s Economic Activity Expands for Third Month as CBN Composite PMI Hits 52.7
CBN Reports Third Consecutive Month of Economic Expansion in Nigeria
Nigeria’s economic activity expanded for the third consecutive month in August 2026, with the Central Bank of Nigeria’s (CBN) Composite Purchasing Managers’ Index (PMI) rising to 52.7 points from 51.1 in July.
The latest reading indicates continued expansion in overall business activity, with services and agriculture providing the main support while the industrial sector returned to growth.
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Composite PMI Rises to 52.7
The CBN’s Composite PMI remained above the 50-point threshold in August, which separates expansion from contraction.
The index increased by 1.6 points from July’s 51.1 reading, extending the economy’s expansion streak to three consecutive months. The July reading had marked the second month of growth after the composite index fell below the 50-point threshold earlier in the year.
The August performance suggests that business activity continued to strengthen across parts of the Nigerian economy, although expansion remained uneven between sectors.
Services Sector Maintains Growth
The services sector remained one of the major drivers of the August expansion.
The Services PMI increased to 53.3 points from its July level, marking a second consecutive month of expansion. Nine of the 11 services subsectors surveyed recorded growth, while two recorded declines.
The performance indicates continued improvement in activity across much of the services economy, which accounts for a substantial share of Nigeria’s overall economic output.
Agriculture Records Continued Expansion
Agriculture also maintained its positive performance during the review period.
The Agriculture PMI rose to 53.4 points in August, extending the sector’s expansion streak to 25 consecutive months. All five agricultural subsectors surveyed recorded growth during the month.
The continued expansion in agriculture provides support for economic activity outside the oil sector and contributes to demand across transportation, trade, processing and other parts of the domestic economy.
Industrial Activity Returns to Growth
One of the notable developments in the August PMI report was the return of the industrial sector to expansion.
The Industry PMI increased to 50.6 points, moving above the 50-point threshold after the sector recorded contractions from April 2026.
However, the improvement was not broad-based across all industrial subsectors. Eleven of the 16 subsectors surveyed recorded declines, while five reported expansion.
The result therefore points to an improvement in overall industrial activity, although significant weaknesses remain within parts of the sector.
Business Activity Remains Uneven
Across the 32 subsectors covered by the CBN survey, 19 recorded expansion in August, while 13 reported declines.
This suggests that the overall improvement in the composite PMI does not represent uniform growth across the economy.
The performance of individual businesses and industries will continue to depend on factors such as consumer demand, input costs, financing conditions, infrastructure and operating expenses.
Input and Output Prices Show Mixed Movement
The August data also showed mixed movements in business prices.
The composite input price index declined by 0.2 points during the month, while the output price index increased by 1.0 point.
According to the reported PMI findings, output price increases in the services and agriculture sectors were higher than the corresponding changes in their input prices.
For businesses, the development could provide some relief from input-cost pressures, although the increase in output prices indicates that pricing pressures have not disappeared.
Implications for Construction and Real Estate
The broader improvement in economic activity could have implications for Nigeria’s construction and property markets if the trend is sustained.
Stronger activity in services, agriculture and industry can support employment, business revenues and demand for commercial and residential property. An improving industrial environment can also benefit construction-material manufacturers and suppliers if higher economic activity translates into stronger demand.
However, the PMI data does not by itself indicate an immediate recovery in housing affordability or construction activity. Developers continue to face challenges linked to land costs, building-material prices, financing conditions and infrastructure.
For the housing market, sustained economic expansion would be more significant if it translates into stronger household incomes and improved access to housing finance.
Economic Expansion Comes Amid Broader Recovery
The latest PMI data follows other indicators pointing to an improvement in Nigeria’s economic performance.
The National Bureau of Statistics reported that Nigeria’s economy grew by 4.43% year-on-year in the second quarter of 2026, compared with 3.89% in the first quarter. Growth was supported by both the oil and non-oil sectors.
The combination of stronger GDP growth and three consecutive months of expansion in the CBN Composite PMI points to improved economic momentum in the middle of 2026.
However, the pace and sustainability of the recovery will depend on whether stronger economic activity continues to translate into increased production, investment and household purchasing power.
Outlook
Nigeria’s Composite PMI rising to 52.7 points in August marks the third consecutive month of economic expansion and provides another indication of improving business activity.
Services and agriculture remained important drivers of growth, while the return of industry to expansion represents a notable improvement after several months of contraction. Nevertheless, the uneven performance across subsectors shows that challenges remain within parts of the economy.
For the housing and construction sectors, sustained economic expansion could support stronger demand and investment over time. The more important test, however, will be whether the broader recovery improves household purchasing power, business confidence and access to financing sufficiently to support increased housing and property-market activity.
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