The Central Bank of Nigeria(CBN) has cautioned that growing input costs across major sectors could cause a new wave of consumer price inflation, as companies continue to absorb cost pressures which may soon become unsustainable.
This was revealed in the apex bank’s June 2025 Purchasing Managers’ Index report.
The research states that during the review period, the input price indices for the industry, services, and agriculture sectors, as well as for the composite economy, all outperformed their corresponding output price indices.
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Given that businesses are already absorbing costs rather than passing them on to customers, the development, according to the CBN, indicates growing pressure on corporate margins.
The report stated in part, “The increase in the gap between higher input costs and output price tends to mount pressure on business profit margins. Cost absorption by firms is likely to be unsustainable in the long term and may foreshadow future consumer price inflation,”
According to the report, the agriculture sector had the largest difference between input and output prices in June, with the greatest cost absorption index of 9.8 points.
The services sector, on the other hand, had the smallest difference, at 4.4 points.
In spite of this, commercial activity increased throughout the month in all three of the main sectors: industry, services, and agriculture. In June 2025, the composite PMI was 52.3 index points, indicating that economic activity had expanded for the sixth straight month.
25 of the 36 subsectors polled nationwide indicated growth over the reviewed period, indicating widespread economic vigour.
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The CBN ascribed the growth in services to a rise in activity in all of the subsectors. The PMI result for the agriculture sector was the highest of the three segments at 55.2 index points, indicating that it led the overall growth.
Additionally, it experienced its eleventh straight month of growth, mostly due to an increase in farming activity. In June, the agriculture category’s five subsectors all saw growth.
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