The manufacturers Association of Nigeria MAN has reported that the manufacturer’s Confidence Index (MCII) for the fourth quarter of 2022 declined to 55.0 points.
The result of the MCCI fourth quarter 2022 survey shows the perceptions of manufacturers on movements in the macroeconomic environment, compared with the operating environment in the third quarter of the year
According to the association, in the fourth quarter of 2022, the Aggregate Index Score (AIS) of MCCI declined to 55.0 points down from 55.4 points recorded in the third quarter of the year.
Among the standard Diffusion Factors, Current Business Condition and Business Condition for the next three months scored above 50 benchmarks with increases above what was obtained in the preceding quarter.
Current Employment Condition (Rate of Employment) and Production level in the next three months scored above the 50 benchmark points with a decline below what was obtained in the third quarter of the year. Employment Condition for the next three months dipped below the benchmark points to 48.8 points which is also below 49.2 points obtained in the preceding quarter.
Employment decision by manufacturers has been so difficult due to the unpredictability and difficulty in the macroeconomic enviroment.
The issues of acute shortage of forex and depreciation in Naira value, cost of energy and limited supply of electricity, resurging multiplicity of taxes/levies/charges from the Government, speculation about the effect of redesigning of Naira currency, the National elections and the lingering adverse effect of Russian-Ukrainian war were major concerns of manufacturers in the quarter.
The outcome of analysis of index scores of the 10 Sector Groups using the same diffusion factors such as Business Condition, Employment Condition and Production level are presented below.
Analysis of the examination of the ten sectoral groups shows that Index Score of Pulp, Paper, Printing & Publishing (49.6 points) and Motor Vehicle & Miscellaneous Assembly (48.4 points) fell below the 50 benchmark points. The score indicates a gross loss of confidence in the economy my manufacturers operating in the two sectoral groups. Particularly, the motorcycle sub-group of the Motor Vehicle & Miscellaneous Assembly has been facing difficulty following the banning of motorcycles various States Government in some metropolis. Food, Beverage & Tobacco; Textile Apparel & Footwear; Wood & Wood Products; Chemical & Pharmaceutical; Non-Metallic Products; Domestic/Industrial Plastic & Rubber; Electrical & Electronic; and Basic Metal, Iron & Steel groups all scored above 50 based points. The scores suggest that manufactures operating in the groups are confident in the macro economy int eh period under review
“An observation of analysis of the 14 industrial zones shows that Index scores of Rivers/Bayelsa (48.0 points) and Criss-Rivers/Akwa-Ibom (46.5 points) fell below the 50 base points.” “The scores indicate that manufacturing operating in the zones have lost confidence in the economy due to persisting harsh operating environment in the zones. Imo/Abia, Kaduna, Ogun, Apapa and Kwara/Kogi though have index scores above 50 benchmark points in the fourth quarter of 2022 but with declines below what obtained in the third quarter of the year.”
Edo/Delta, Oyo/Ondo/Ekiti/Osun, Kano, Ikeja, Anambra/Enugu and Bauchi/Benue/Plateau have index scores above the 50 base points in the quarter under review with increases in the quarter under review. The scores indicates continuous improvement of the confidence of manufacturers operating in the zones in the economy.
“Index scores of Abuja zone increased to 50.7 points in the fourth quarter of 2022 from 43.5 points obtained in the preceding quarter. The score indicates a significant improvement in the confidence of the manufacturers operating in the zone. Apart from the general macroeconomic challenges that affect all the zones, it is important to look into and address State-specific challenges as they concern the zones, “ the report stated.