This week, we examine the global and domestic PMI data, highlighting the ongoing recovery in global manufacturing and the rising momentum in Nigeria’s private sector. In February 2025, the global manufacturing sector marked its second consecutive month of recovery, with the Global Manufacturing PMI increasing to 50.6 from 50.1 in January. This indicates moderate growth, though it remains below historical trends.
Thank you for reading this post, don't forget to subscribe!Economists are cautiously optimistic about the global recovery. “The modest growth in global manufacturing PMI signals a stabilization after a prolonged downturn. While it’s encouraging to see improvement, it’s crucial to remember that growth is still below historical norms,” said Dr. Emily Harris, Senior Economist at the Global Economic Institute. Many experts believe that global manufacturing will face headwinds from rising input costs and geopolitical tensions, though the steady rebound in key economies, like the United States, offers hope for sustained progress.
The recovery was largely driven by the United States, where production saw its steepest increase since May 2022, after five months of decline. Among 33 economies tracked by the S&P Global PMI survey, only India experienced stronger growth than the US in February. However, regional performances varied, with the eurozone continuing to face contraction for the 23rd straight month. Economists attribute this to ongoing supply chain challenges, energy price concerns, and reduced demand in key European markets. “The eurozone’s struggle to emerge from contraction is a stark reminder of the lingering impacts of the energy crisis and political uncertainty,” said Maria Kovalchuk, an economist specializing in European markets.
In Asia, manufacturing activity surged to its strongest level in six months, supporting the region’s economic outlook. Economists point to China’s recovery as a key factor, as its demand for both domestic and global goods continues to drive regional growth. “China’s economic policies are stabilizing the region’s manufacturing output, even though challenges persist in terms of raw material costs and labor shortages,” commented Dr. Wei Li, an economist at the Asia-Pacific Development Bank.
New factory orders globally rose at their fastest pace since March 2022, spurred by strong domestic demand. Although global export orders saw a slight decline, the drop was the smallest in nine months, suggesting stabilization in global trade. In North America, rising input costs, particularly for raw materials, added inflationary pressure, though selling prices remained stable in the eurozone and China. “The global trade environment is slowly stabilizing after the disruptions caused by the pandemic, but inflationary pressures will likely persist, especially as energy and labor costs rise,” stated John Miller, Chief Economist at the International Trade Association.
On the domestic front, Nigeria’s private sector saw significant growth in February 2025. The headline PMI climbed to 53.7 from 52.0 in January, marking the third consecutive month of growth. This reflected a boost in output, new orders, and purchasing activity, driven by increased demand and signs of easing inflation. Nigerian economists are particularly optimistic, with Dr. Amina Yusuf, an economist at the Lagos Institute of Economic Studies, commenting, “The Nigerian economy shows remarkable resilience. While inflation is still a concern, the steady rise in output and orders signals growing confidence in the private sector’s recovery.”
February’s output growth was the strongest in over a year, attributed to higher sales and stronger demand. All major sectors—agriculture, manufacturing, services, and wholesale & retail—recorded growth, although wholesale & retail saw marginal gains. New business orders surged, reaching the highest level in over a year as customer confidence rose. Dr. Yusuf added, “The broad-based growth across sectors shows a diversified economic recovery. Agriculture, manufacturing, and services are all contributing, and that’s a positive sign for long-term growth.”
Input cost inflation eased to a ten-month low, though rising raw material prices and high staff costs continued to challenge businesses. Employment growth remained modest, as firms remained cautious in workforce expansion. However, backlogs of work decreased, suggesting efficient capacity management. “The easing of input cost inflation is encouraging, but businesses are still dealing with the challenges of high labor costs, which could constrain employment growth,” said Dr. Yusuf.
Businesses also increased their purchasing activity, taking advantage of stabilizing costs to build inventories in anticipation of continued demand. Supply chain performance improved, with suppliers’ delivery times shortening at the fastest rate in seven months, driven by better logistics and prompt payments. Economists agree that improvements in supply chain performance are key to sustaining growth. “A more efficient supply chain will allow Nigerian manufacturers to increase production and fulfill orders on time, strengthening their competitive edge,” explained Dr. Olanrewaju Bello, a Nigerian economic strategist.
Despite the positive momentum, business sentiment dipped slightly, falling below its long-term average. While companies remain optimistic about future growth, concerns over cost pressures and economic uncertainties persist. However, expansion plans, including new plant openings and increased export activities, continue to support long-term confidence in Nigeria’s economic outlook. “The dip in sentiment is understandable given the global uncertainties, but the continued expansion plans signal that Nigerian businesses are positioning themselves for growth in the medium to long term,” concluded Dr. Bello.
In summary, while the global manufacturing recovery is ongoing, challenges remain in certain regions, and Nigeria’s PMI data suggests a positive trajectory, with cautious optimism prevailing among economists for the country’s economic future.
