•As PMI rebounds to 50.1pts •Business confidence moderates to 7.2pts •Households shun houses, cars, investments
•Food remains top spending priority
By Babajide Komolafe
Nigeria’s economy exited contraction in June as the Purchasing Managers’ Index, PMI, rebounded to 50.1 points from 49.6 points in May, driven by sustained expansion in the agriculture sector despite continued weakness in industry and services, the Central Bank of Nigeria, CBN, has said in its latest PMI Report released yesterday.
But, according to another report, Household Expectations Survey (HES), also released yesterday by the apex bank, Nigerians remained pessimistic about prevailing economic conditions in June despite growing optimism about the medium-term outlook.
PMI Reports focuses on corporate organizations while HES is basically a household survey.
Meanwhile, a third report released by CBN yesterday also indicated that business confidence among Nigerian firms fell for the fourth consecutive month in June.
According to the apex bank, “The composite PMI rose to 50.1 points in June 2026, signalling a return to expansion in overall economic activity after the contraction recorded in May 2026.” The report added: “Of the 36 subsectors surveyed, 19 reported expansion, while 17 recorded declines in business activity.”
The CBN attributed the recovery entirely to agriculture, stating: “The Agriculture PMI increased to 52.1 points in June 2026 from 50.9 points in May 2026, indicating stronger growth momentum and marking the twenty-third consecutive month of expansion in the sector.” It further noted that “all five agricultural subsectors surveyed recorded growth during the review period,” with Forestry reporting the strongest growth.
The report, however, showed that manufacturing and services remained under pressure. It stated: “The Industry PMI stood at 49.5 points in June 2026, indicating a contraction in industrial activity,” while “The Services PMI registered 49.4 points in June 2026, reflecting a contraction in business activity within the sector.”
On the outlook for the broader economy, the CBN said: “Overall, the June 2026 PMI points to a modest recovery in overall economic activity, driven by sustained expansion in the Agriculture sector, which offset the contractions recorded in the Industry and Services sectors.”
The report added: “The return of the Composite PMI to expansionary territory, coupled with easing input and output price pressures, suggests improving business conditions and provides a cautiously optimistic outlook for economic growth in the near term.”
Providing further evidence of easing cost pressures, the apex bank stated: “The composite input and output price indices declined by 2.5 and 0.8 points, respectively, in June 2026, suggesting a moderation in cost and selling price pressures.”
The report also noted: “The Industry PMI edged up to 49.5 points in June 2026 from 49.3 points in May 2026, indicating a slower pace of contraction in industrial activity,” while “The Services PMI improved marginally to 49.4 points in June 2026 from 49.3 points in May 2026. Although the sector remained in contractionary territory for the third consecutive month following fourteen months of sustained expansion, the uptick suggests a moderation in the pace of decline.”
Pessimism still pervades
But Nigerians remained pessimistic about prevailing economic conditions in June despite growing optimism in PMI outcomes about the medium-term outlook.
According to the CBN’s, Household Expectations Survey (HES) households have continued to prioritise spending on food while deferring purchases of houses, vehicles and other major assets.
The apex bank in its HES June 2026 report, stated: “The Overall Consumer Sentiments in June 2026 stood at -14.6 index points compared to -16.8 index points recorded in May 2026, indicating still a pessimistic but improving outlook on the macroeconomy.” It added that “The Economic Conditions index recorded –18.5 points in June 2026, also indicating a pessimistic outlook on current economic conditions among households.”
The report, however, pointed to improving expectations, stating: “In September 2026, consumer confidence was positive at 3.1 points, driven by positive outlook on family income and economic conditions.” It further noted: “Over the next six months, the Consumer Confidence Index was optimistic at 11.7 points, reflecting optimism anchored on positive outlook on family income, economic conditions, and improving family financial situation.”
On spending priorities, the CBN said: “Across all periods, respondents consistently prioritized basic expenditures such as food, transportation, other household goods, Electricity & Water, etc.” It added: “Food consistently accounted for the highest expected spending and is projected to remain the primary focus over the next six months.” Transportation, other household goods and education were identified as the next major spending priorities.
The survey also showed continued caution toward major purchases. According to the report, “Households showed reluctance to spend large parts of their income on major purchases like House, car/motor vehicles, investments, as indicated by negative sentiment indices across all periods.”
