Nigeria’s Manufacturers’ confidence has risen by 0.7% to 54.6 points in the second quarter of the year compared to 53.9 points in the first quarter.
This was disclosed in the Manufacturers CEO’s Confidence Index (MCCI) report by the Manufacturers Association of Nigeria (MAN) on Tuesday, according to the News Agency of Nigeria.
The report measures the confidence and mood of manufacturing operators in Nigeria and their response to movements in the macroeconomy and government policies, using primary data mined through direct survey of over 400 Chief Executive Officers of MAN member-companies.
What MAN is saying
MAN disclosed that the report attributes its increase in confidence to the anticipated improvement in business condition, employment condition, production level in the third quarter of the year and survival strategies adopted by manufacturers.
- It added that the marginal increase was achieved despite many challenges facing the sector, including poor access to foreign exchange, unavailable raw materials, rising inflation, frequent collapse of the national grid, increase in price of diesel, scarcity of wheat and other manufacturing inputs.
- “Business condition in the quarter under review was more challenging when compared with the first quarter of the year just as employment condition worsened.
- “Nevertheless, the operating environment in the quarter under review was fairly better than the condition in the preceding quarter.
- “This is due to compelling adjustments made by government, manufacturers and households in response to general increase in price, foreign exchange shortage, increasing cost of energy, scarcity of raw materials and many more, thrown up by the Russia-Ukraine war,” it said.
The index score of wood and wood products was 49 points in the second quarter of the year; a marginal uptick from 48.9 points obtained in the first half of the year, though below the 50 baseline points.
Meanwhile, the index score of electrical and electronics group improved to 50 points from 49.9 points, and motor vehicle and miscellaneous assembly moved above the baseline to 50.1 points from 49.2 points of the preceding quarter.
- “The aggregate MCCI score of 54.6 points shows that manufacturers still have minimal confidence in the economy, with the expectation of improvement in the operating environment.
- “The business ambience in the second quarter was no doubt beset by numerous macroeconomic, regulatory and externally induced challenges, compounded by the lingering backlashes of COVID-19 pandemic and the ongoing Russian-Ukrainian war”
- “It is, therefore, important for the government to intentionally create an anticipatory policy framework to facilitate automatic stabilisation of the economy in the event of domestic or global shocks while addressing the afore-mentioned familiar operating challenges limiting the performance of the sector,” MAN added.
What you should know
In the recently concluded Nairametrics Economic outlook webinar this month, Mr. Johnson Chukwu, MD of Cowry Asset Management Ltd, stated that the Nigerian government will have to focus on developing key sectors, including manufacturing, ICT and trade to grow the economy.
