Manufacturing index hits six-month low at 115.8 factors in January

Nigeria’s manufacturing sector expanded extra slowly in January 2026 as rising prices, weak demand, and structural challenges hit chemical substances, prescribed drugs, plastics, and rubber sub-sectors hardest.

The slowdown was revealed within the newest NESG–Stanbic IBTC Enterprise Confidence Monitor (BCM), which confirmed that whereas general enterprise situations remained in growth territory, momentum weakened noticeably.

The Present Enterprise Efficiency Index fell to 105.8 factors in January from 112.0 factors in December 2025, marking its lowest stage in six months, although barely above the 105.7 factors recorded in January 2025.

The BCM report factors to uneven sectoral efficiency, with non-manufacturing actions sustaining development whilst manufacturing and commerce confronted headwinds.

Rising operational prices, weak post-festive demand, and broader infrastructural constraints continued to dampen investor confidence throughout key sectors.

What the report is saying 

The January BCM highlights a broad-based slowdown throughout the economic system, with various sectoral impacts.

• The Manufacturing sector eased to 115.8 factors from 117.9 factors in December 2025.
• Providers declined to 102.1 factors from 104.3 factors, although each sectors remained in growth territory.
• Agriculture slipped into contraction at 99.5 factors, down sharply from 112.9 factors, whereas Commerce fell additional into contraction at 92.7 factors from 123.8 factors in December.

General, the information point out that post-festive moderation, price pressures, and weak shopper demand are key drivers of the slowdown.

Extra Insights 

Rising enterprise prices emerged as a serious constraint in January, compounding structural challenges.

• The price of doing enterprise surged to 90.5 factors from 54.7 factors in December, whereas enter costs jumped to 96.9 factors from 68.9 factors.
• NESG attributed the surge to a mix of latest tax reforms, gasoline worth changes, and lingering inflationary pressures.
• Different challenges embrace restricted entry to finance, unreliable energy provide, rising business property prices, and poor infrastructure, all of which proceed to discourage funding.

The convergence of those pressures has squeezed revenue margins and disrupted output throughout a number of sectors.

The manufacturing slowdown was notably acute in sure sub-sectors, reflecting broader vulnerabilities.

• Chemical and Pharmaceutical Merchandise, and Plastic and Rubber Merchandise recorded the steepest declines.
• Wooden and Wooden Merchandise, and Non-Metallic Merchandise slipped into contraction territory.
• Textile, Attire and Footwear, Cement, Motor Automobiles and Meeting, and Different Manufacturing maintained development or remained flat.

NESG highlighted restricted financing, persistent energy outages, uncooked materials shortages, insecurity, poor infrastructure, and rising enter prices as key constraints on manufacturing, elevating manufacturing prices and limiting new funding.

In distinction, the Non-manufacturing sector strengthened in January, displaying resilience regardless of wider financial challenges.

• The BCM Index rose to 115.3 factors from 110.2 factors in December 2025, a pointy rebound from contraction in January 2025.
• Oil and Fuel Providers and Crude Petroleum drove a lot of the expansion, shifting firmly into growth territory.
• Progress in Development and Pure Fuel moderated in comparison with December however remained constructive.

The information means that non-manufacturing actions might act as a stabilizing issue for the economic system amid manufacturing headwinds.

Providers and Commerce face headwinds 

Providers and Commerce sectors confirmed indicators of pressure through the month.

• Providers slowed, with weaker situations in Monetary Establishments, Actual Property, and Telecoms and Info Providers, although Skilled, Scientific and Technical Providers improved.
• Commerce fell sharply into contraction at 92.7 factors, ending a multi-month growth streak, with wholesale commerce notably affected.
• NESG cited stock drawdowns, price pressures, and weak post-festive demand as key drivers of the downturn.

These tendencies underline the delicate restoration path of Nigeria’s economic system, highlighting ongoing vulnerabilities in manufacturing and commerce regardless of pockets of development in non-manufacturing sectors.

What it is best to know 

NESG stories Nigeria’s enterprise setting prolonged its growth streak to a twelfth consecutive month in December 2025.

The Future Enterprise Expectation Index dipped to 132.6 factors in December from 134.8 in November.