Nigeria’s business activity expanded for a fourth consecutive month in September, but households became markedly more pessimistic about the economy, family finances and prices, according to new surveys from the Central Bank of Nigeria.
The contrasting results present a more complicated picture than a single growth or inflation figure can capture. Companies reported rising activity across industry, services and agriculture, while many households said the cost of living continued to shape spending decisions and weaken confidence.
The CBN’s September Purchasing Managers’ Index rose to 53.0 points from 52.7 in August. A reading above 50 indicates expansion, while a figure below 50 points to contraction. Twenty-three of the 32 subsectors covered by the survey expanded, with nine recording declines.
The survey was conducted between 7 and 11 September among 1,900 purchasing and supply executives across industry, services and agriculture.
Industrial activity showed the clearest improvement. The Industry PMI increased to 52.0 points from 50.6 in August, its second consecutive month of expansion. Output rose to 53.2 points, supported by stronger new orders and employment, while the raw materials inventory index returned to expansion at 51.1 points.
Services remained positive at 53.2 points, only slightly lower than the 53.3 recorded in August. Agriculture also remained in expansion at 53.1 points, compared with 53.4 in the previous month. The CBN said agriculture had now expanded for 26 consecutive months.
Those figures suggest that economic activity is broadening rather than depending entirely on one sector. However, the same survey showed renewed pressure on business costs. The composite input price index increased by 0.8 points, even as the output price index declined by 0.5 points.
That combination matters for companies and consumers. Businesses facing higher costs may have less room to hire, invest or reduce prices, particularly if competition prevents them from passing the full increase to customers.
Households feel the squeeze
The CBN’s separate Household Expectations Survey delivered a more downbeat assessment. The Overall Consumer Sentiments Index fell to minus 18.7 points in September from minus 9.9 in August, signalling a sharp increase in pessimism.
The Economic Conditions Index stood at minus 21.5 points. The Family Financial Situation Index was weaker at minus 23.9, while the Family Income Sentiments Index was minus 10.5.
Households also expressed greater concern about prices. The average price sentiment index rose to 33.5 points from 23.0 in August. A related CBN inflation expectations survey found that 77.2 per cent of household respondents considered inflation high in September, up from 67.2 per cent a month earlier.
The pressure was not evenly distributed. The share was 79.1 per cent among rural households and 76.2 per cent among urban households. Among respondents earning below N70,000, 80 per cent described inflation as high, the highest proportion across the income groups reported.
Energy costs, interest rates, exchange-rate pressures and insecurity were among the factors respondents associated with inflation. Food remained the leading spending priority, followed by transport, household goods, education, electricity and water.
The caution was most visible in plans for major purchases. Sentiment indices for buying houses, motor vehicles, investments and consumer durables were all deeply negative. The house-purchase index was minus 68.2, while the vehicle index was minus 67.3.
These are sentiment measures, not direct records of household income or retail sales. They indicate how people assess their present circumstances and future prospects. Even so, they are important because confidence can influence whether families spend, save, borrow or postpone major decisions.
Why growth and pessimism can coexist
The apparent contradiction is understandable. The PMI measures whether business activity is expanding compared with the previous month. It does not show that every company is thriving, that incomes are rising at the same pace or that the benefits of growth are reaching households evenly.
Official inflation also measures the rate at which prices are changing, rather than whether prices have returned to earlier levels. Nigeria’s headline inflation eased marginally to 15.39 per cent in August from 15.43 per cent in July, according to the National Bureau of Statistics. Prices can therefore continue to rise even when the inflation rate falls.
The CBN’s latest monetary-policy decision also reflects the tension between supporting growth and controlling prices. In September, the Monetary Policy Committee reset the benchmark Monetary Policy Rate to 23 per cent, down from 26.5 per cent in July. Lower borrowing costs can support investment, but policymakers remain alert to renewed inflationary pressure.
Households themselves were divided over the trade-off. The survey found that 45.1 per cent favoured higher interest rates when presented as a tool for controlling inflation, while 44.8 per cent preferred lower rates even if they came with the risk of higher inflation.
There was some optimism about the months ahead. The overall consumer sentiment index was projected to improve to minus 8.7 in the following month, minus 0.4 over three months and a positive 7.1 over six months.
For that recovery in confidence to become durable, the improvement in business activity will need to translate into steadier employment, stronger household earnings and relief from the costs Nigerians encounter most often.
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