The latest NESG–Stanbic IBTC Business Confidence Monitor (BCM), has revealed that Nigeria’s manufacturing sector expanded more slowly in January 2026, with the Business Performance Index dropping to 105.8 points in January from 112.0 points in December 2025.
This marks its lowest level in six months, though slightly above the 105.7 points recorded in January 2025.
The report showed that though overall business conditions remained in expansion territory, momentum weakened noticeably.
The BCM report points to uneven sectoral performance, with non-manufacturing activities sustaining growth even as manufacturing and trade faced headwinds.
Rising operational costs, weak post-festive demand, and broader infrastructural constraints continued to dampen investor confidence across key sectors.
According to the report, manufacturing sector eased to 115.8 points from 117.9 points in December 2025, services declined to 102.1 points from 104.3 points, though both sectors remained in expansion territory, agriculture slipped into contraction at 99.5 points, down sharply from 112.9 points, while trade fell further into contraction at 92.7 points from 123.8 points in December.
Overall, the data indicate that post-festive moderation, cost pressures, and weak consumer demand are key drivers of the slowdown.
Rising business costs was identified as a major constraint in January, compounding structural challenges.
The cost of doing business surged to 90.5 points from 54.7 points in December, while input prices jumped to 96.9 points from 68.9 points.
The NESG attributed the surge to a combination of new tax reforms, fuel price adjustments, and lingering inflationary pressures.
Other challenges include limited access to finance, unreliable power supply, rising commercial property costs, and poor infrastructure, all of which continue to discourage investment.
It noted that all these pressures have squeezed profit margins and disrupted output across several sectors.
The manufacturing slowdown was particularly acute in certain sub-sectors, reflecting broader vulnerabilities.
Chemical and Pharmaceutical Products, and Plastic and Rubber Products recorded the steepest declines.
Wood and Wood Products, and Non-Metallic Products slipped into contraction territory.
Textile, Apparel and Footwear, Cement, Motor Vehicles and Assembly, and Other Manufacturing maintained growth or remained flat.
The NESG highlighted limited financing, persistent power outages, raw material shortages, insecurity, poor infrastructure, and rising input costs as key constraints on manufacturing, raising production costs and limiting new investment.
In contrast, the non-manufacturing sector strengthened in January, showing resilience despite wider economic challenges.
The BCM Index rose to 115.3 points from 110.2 points in December 2025, a sharp rebound from contraction in January 2025.
Oil and Gas Services and Crude Petroleum drove much of the growth, moving firmly into expansion territory.
Growth in Construction and Natural Gas moderated compared to December but remained positive.
The data suggests that non-manufacturing activities could act as a stabilizing factor for the economy amid manufacturing headwinds.
Services and Trade sectors showed signs of strain during the month.
NESG cited inventory drawdowns, cost pressures, and weak post-festive demand as key drivers of the downturn.
These trends underline the fragile recovery path of Nigeria’s economy, highlighting ongoing vulnerabilities in manufacturing and trade despite pockets of growth in non-manufacturing sectors.
