The Central Bank of Nigeria (CBN) has raised concerns that rising input costs across major
sectors may soon trigger another wave of consumer price inflation. This warning was
contained in the June 2025 Purchasing Managers’ Index (PMI) report released by the apex
bank.
According to the report, the input price indices for the composite economy as well as the
Industry, Services, and Agriculture sectors were all higher than their corresponding output
price indices during the period under review. This trend, the CBN noted, reflects growing
pressure on business margins.
Currently, many firms are absorbing these increased costs rather than transferring them to
consumers. However, the CBN cautioned that this approach may soon become
unsustainable, potentially forcing businesses to adjust their pricing, which could drive up
consumer inflation.
The report highlighted that the widening gap between rising input costs and output prices is putting increasing pressure on business profit margins. It warned that firms’ continued cost absorption may not be sustainable in the long run and could signal a potential rise in
consumer price inflation.
Among the sectors, agriculture recorded the highest cost absorption index in June at 9.8
points, reflecting the largest disparity between input and output prices. In contrast, the
Services sector had the lowest gap, with an index of 4.4 points.
Despite mounting cost pressures, the Industry, Services, and Agriculture sectors all recorded growth in June 2025. The composite Purchasing Managers’ Index (PMI) rose to 52.3 index points, indicating sustained economic expansion for the sixth consecutive month.
Of the 36 subsectors surveyed nationwide, 25 reported increased activity, reflecting
widespread growth across the economy. The Industry sector posted a PMI of 51.4 points,
driven by higher production levels, with nine out of 17 subsectors expanding.
The Services sector recorded a PMI of 51.3 points, as 11 of its 14 subsectors experienced
growth. According to the Central Bank of Nigeria, this was due to increased business activity across the sector.
The Agriculture sector led the overall expansion, registering a PMI of 55.2 points the highes among the three. It marked its eleventh straight month of growth, supported by improved
farming activities, with all five subsectors showing positive performance in June.
