The manufacturing sector of the economy which has been under intense pressure is beginning to regain its upward growth track, following improvements in power generation from the national grid, moderation in the strangulating effects of the January 2012 fuel price increase, as well as the floods and insecurity in some parts of the country.
A report by the Nigerian Bureau of Statistics (NBS) for the fourth quarter of 2012 showed that the sector which declined to 6.3 percent in the first quarter, recorded growth of 7.00 percent at the end of the year.
The NBS attributed the recovery to improvements in power generation, as well as the declining effects of the fuel price increase, floods and insecurity in the northern part of the country.
Already, the growth rebound is reverberating on the equities the market, as the stocks of manufacturing companies build momentum.
During the week ended February 22, 2013, the First Securities Discount House (FSDH) manufacturing index gained 4.41 percent to close at 480.92 points. The appreciation in the index followed the gains in the share prices of Dangote Cement which went up by up 10.34 percent to N160.00, Nestle 6.56% to N890.00, Nigerian Breweries 1.23 percent, to N166.00 and PZ Cussons 0.62 percent to N40.50.
Growth in the manufacturing sector is one of the indices of measuring economic development, and has
partly led to creation of the global manufacturing competitiveness index. And a 2013 Manufacturing Competitiveness Index study carried out by Deloitte shows that China maintained its 2010 ranking as the most competitive manufacturing nation in the world.
Five developed economy nations were ranked in the top 10 with Germany coming second, the U.S. third, South Korea fifth, Canada seventh and Japan tenth. Five emerging economy nations were ranked in the top 10 today with China first, India fourth, Taiwan sixth, Brazil eighth, and Singapore ninth.
Deloitte forecasts that five years from now, emerging economy nations will emerge top three spots, with China retaining the top spot, and India and Brazil moving up to claim the second and third rankings, respectively.
The resumed growth in the manufacturing sector of the Nigerian economy is seen as a positive signal for the economic development of the economy.
The study by the NBS further showed that the GDP growth has steadily recovered from a low of 6.3 percent year –on- year in Q1 2012 to 7.0 percent.
The bureau forecasts GDP growth of 6.75 percent in 2013, compared with a provisional 6.61 percent in 2012, and 7.27 percent in 2014 while the IMF projects 6.7 percent GDP growth this year. The forecasts are informed by the Bureau’s macro-econometric model, which is based on linkages between the real, financial and external sectors, and assumption of continuity of economic policy.