Nigeria’s economic activity slipped into contraction in April 2026 as the Purchasing Managers’ Index (PMI) fell to 49.4, marking the first decline after 16 consecutive months of expansion, according to the latest report released by the Central Bank of Nigeria (CBN) on Wednesday.
PMI is a monthly survey-based indicator that shows how the private sector is doing, in the critical sectors of the economy, particularl manufacturing.
The figure, which dropped below the 50-point threshold that separates expansion from contraction is considered a reflection of a broad-based slowdown across key sectors, particularly industry and services, even as agriculture remained resilient.
Specifically, Nigeria’s economic expansion gained further momentum in March 2026 as the PMI recorded at 53.2 points.
The April PMI data points to a fragile economic environment, where weakening demand, rising costs, and external uncertainties are beginning to weigh on business activity, raising concerns about the sustainability of recent growth momentum.
Above 50, the economy is considered to be expanding as business activity is growing, below 50, it is experiencing contraction as activity is shrinking, while at 50, no change as conditions are stable or neutral.
However, PMI is not about GDP level, but momentum as to whether things are getting better or worse, basically, comparing the current month against the previous one.
Some analysts say, below 50 indicates that new orders were stalled, after several months of growth. It also showed that demand was weakened. While some firms witnessed patronage on more customers, others experienced demand drop, leaving orders generally stagnant, which generally resulted in slow output growth.
The analysts further argue that Nigeria deserves continued 50 plus, an indication of broad-based expansion, as witnessed in March 2026, where 31 of 36 subsectors grew.
The CBN’s report however stated that, “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.”
A breakdown of the composite index shows that the contraction was largely driven by weakening demand conditions and slowing business activity.
Output fell to 49.7, new orders declined more sharply to 48.4, while employment dropped to 49.6, all indicating reduced momentum across the economy.
Inventory levels also weakened, with the stock of raw materials index at 48.7, pointing to reduced purchasing activity by firms. However, supplier delivery time stood at 50.9, suggesting slightly improved supply chain efficiency despite the broader slowdown.
Out of the 36 subsectors surveyed, 19 recorded contraction, one remained unchanged, and only 16 posted expansion, primary metals recorded the steepest decline, while forestry emerged as the fastest-growing subsector during the month.
The report also linked the moderation in business conditions to external pressures, including heightened geopolitical tensions, particularly in the Middle East, which may have disrupted supply chains and business confidence.
Industry and services contracts as demand weakens
Sectoral performance shows that the downturn was concentrated in the industry and services sectors, both of which slipped below the growth threshold in April.
The industry PMI stood at 49.5, indicating marginal contraction. While production (output) remained slightly positive at 50.2, new orders and employment fell to 49.5 and 48.7, respectively, reflecting weaker demand and cautious hiring by firms.
Raw material inventories dropped sharply to 46.8, suggesting firms scaled back input purchases amid uncertainty. Eight out of 17 industrial subsectors recorded contraction, reversing earlier expansion trends.
The services sector recorded a deeper contraction, with PMI at 48.8, its first decline after 14 months of growth. Business activity (output), new orders, employment, and inventories all fell to 49.2, 47.5, 49.0, and 49.5, respectively.
Ten of the 14 services subsectors contracted, with transportation and warehousing posting the steepest drop, while educational services recorded the strongest growth within the sector.
Agriculture remains resilient as cost pressures persist
In contrast, the agriculture sector maintained its expansion streak, with PMI at 50.2, marking the 21st consecutive month of growth.
The sector’s resilience was supported by continued expansion in general farming activities (50.5) and employment (52.1), although new orders and raw material inventories weakened, signalling emerging pressures beneath the surface.
Three of the five agricultural subsectors expanded, one remained unchanged, and one contracted, with forestry again leading growth.
Meanwhile, price pressures intensified across the economy. The report shows that both input and output price indices rose by 3.2 points in April, indicating that rising production costs were being passed on to consumers.
Notably, output prices increased faster than input costs in the industry and agriculture sectors, suggesting firms were adjusting prices upward to protect margins.
Nigeria has two main PMIs — Stanbic IBTC/S&P Global (private sector focus) and CBN’s, which includes more public/industry coverage.
