These are not the best of times for Nigeria’s manufacturing sector as growth contracted by -0.13percent year on year, lower than the corresponding quarter of 2018 and Q1 2019.
The growth rate of the sector, on a quarter-on quarter basis, stood at – 4.41percent. The contribution to real GDP in Q2 2019 was 9.10percent, which is lower than 9.29percent recorded in the previous year and 9.79percent recorded in first quarter 2019.
Recent results released by quoted companies on the nation’s bourse show that companies in the manufacturing and consumer goods segment are struggling as profitability waned while the cost of sales have ballooned.
The shrinking consumer wallet companies can no longer pass the cost to the final consumers who are price-sensitive and always ready to shift loyalty to cheaper brands.
The big players in the consumer goods space are also threatened by small player mostly unquoted companies cannibalising on their sales.
The manufacturing sector has 13 activities namely oil refining; cement ; food, beverages and tobacco; textile, and footwear; wood and food products; pulp paper and paper products; chemical and pharmaceutical products; non-metallic products, plastic, and rubber products; electrical and electronic, basic metal and iron and steel; motor vehicles and assembly; and other manufacturing.
The chemical and pharmaceutical products under manufacturing sector contracted -1.27percent in Q2 2019 from 1.66percent in Q1 2019 and 1.52percent in Q4 2018.
However, the cement subsector under grew by 1.58percent in Q2 2019 from 2.81percent in Q1 2019 and 0.98percent in Q4 2018. Food, beverage and tobacco sub-sector grew by 1.22percent in Q2 2019 from 1.76percent in Q1 2019 and 2.22percent in Q4 2018.
Editor: LOLADE AKINMURELE ([email protected]) Graphics: Samuel Iduh
