Nigeria's manufacturing sector continued expanding in June 2026 but at a significantly slower pace than a year earlier, constrained by limited access to finance, chronic power outages, and high operating costs that squeezed profit margins and blocked new investments. The Nigerian Economic Summit Group's Business Confidence Monitor recorded 106.4 points for manufacturing in June, down from 114.1 points in May 2026 and a sharp drop from 123.6 points in June 2025.
The report underscores how structural barriers—credit constraints, energy shortages, inadequate raw materials, infrastructure deficits, and high rental costs—continue to weigh on firms trying to grow and hire. Index readings above 100 indicate expansion, while those below signal contraction.
Uneven Growth Across Sectors
Business activity in agriculture rose to 103.9 points in June from 97.5 in May 2026, moving into expansion territory. Still, that's down from 108.9 points in June 2025. Early harvests and persistent rainfall supported increased crop output during the month, with crop production, agro-allied activities, and fishing all expanding. Livestock and forestry remained in contraction.
Nigeria's business environment expanded for the sixth consecutive month in 2026, but performance was uneven. Manufacturing and trade remained in expansion yet registered weaker performance than the previous month. Services contracted during June. The BCM's current business performance index held steady at 104.6 points relative to May 2026, but that marked a significant decline from 113.6 points in June 2025.
Key sub-indices including general business situation, production, demand conditions, operating profit, financial results, supply order, access to credit, cash flow, and employment all remained in expansion territory. More than half recorded stronger performance compared with May 2026. Trade stockpiling moved into contraction, however, while investment and exports remained depressed.
Manufacturing Subsectors Show Mixed Results
Manufacturing performance varied widely across subsectors in June 2026. Of the six subsectors that recorded expansion, only textile, apparel, and footwear performed better than in May 2026. Food, beverage, and tobacco, along with pulp, paper, and paper products, posted weaker expansion than in the previous month. Chemical and pharmaceutical products, wood and wood products, and non-metallic products moved into expansion territory during the month.
Cement, plastic, and rubber products remained in contraction. Basic metal, iron, and steel also fell into contraction. The remaining two subsectors stayed at the neutral 100-point level. The BCM said manufacturers grappled with credit constraints, energy shortages, inadequate raw materials, infrastructure deficits, and high rental costs during the month.
Non-Manufacturing Sector Rebounds
Business activity in the non-manufacturing sector moved into expansion in June 2026, with the index rising to 106.8 points from 99.4 in May 2026. That reading was lower than the 120.7 points recorded in June 2025. Performance was broadly positive across subsectors. Construction and crude petroleum posted stronger expansion than the previous month, while natural gas and other non-manufacturing activities entered expansion territory. Oil and gas services remained in contraction during the month.
Although the cost of doing business moderated, input prices remained elevated. Firms continued to face major constraints, especially limited access to finance, power outages, high rental costs, and insecurity during June.
Why This Matters:
The slowdown in Nigeria's business expansion reveals how inadequate infrastructure and limited access to credit hold back economic growth that could create jobs and lift incomes. Manufacturing firms can't invest or hire when they're squeezed by energy shortages, high rental costs, and financing barriers. Agriculture's modest rebound offers some relief, but livestock and forestry remain in contraction, threatening rural livelihoods. Services sector contraction signals weakness in the broader economy. Without stronger public investment in power infrastructure, better credit access for small and medium enterprises, and policies that reduce operating costs, Nigeria's expansion will remain fragile and uneven—leaving workers and communities vulnerable to further slowdowns.