Business activities to improve as managers show optimism
After three months of disrupted economic and commercial activities, managers of local manufacturing companies are hopeful for silver linings in the dark clouds of the economy.
This was seen in the recently released July manufacturing purchasing manager’s index (PMI) which stood at 44.9 points, representing an improvement of 3.8 points above the 41.1 points achieved in June.
The PMI report released by the Central Bank of Nigeria (CBN) is an indicator of how the sector fares in a month and also the changes in the level of business activities in the current month compared with the preceding month.
The PMI is usually computed based on survey responses from sector leaders as well as five major metrics which are production level, level of new orders, suppliers delivery time, employment level and raw materials inventory.
For the month of July, the PMI report showed that production level grew by 8.1 points to 44.7, new order grew by 6.7 points to 43.1 points, raw materials inventory grew by 2.2 points to 43.2 points, and quantity of purchases grew by 3.8 points, stock of finished goods also improved by 2.7 points.
“The Manufacturing PMI in the month of July stood at 44.9 index points, of the 14 surveyed subsectors, transportation equipment subsector reported growth (above 50 percent threshold) in the review month while non-metallic mineral products sector reported no change,” the report states.
Although below the 50 index point benchmark, it reflected an improvement and manufacturers are hopeful that going forward, business activities will fully resume and get better.
Francis Meshioye, executive director, JMG Limited, in an interview with BusinesDay said despite the difficult period, business activities are reviving, however, slowly and with hitches.
“To an extent it is picking up gradually, but we are unable to fully optimise operations due to various constrains particularly in accessing foreign exchange,
The manufacturing sector and Nigeria in general is very resilient and going forward, we are hopeful that it will get better but the government has a role to play in creating an enabling and business friendly environment to make the situation better” Meshioye said.
Similarly, Anthony Ajulo, executive director, Colton Group of companies, in a telephone conversation with BusinessDay said that things are picking up gradually but not as good as the previous year. “Things are picking up, at least it is better than what we had in April/May, however, it is not as good as what we had last year. We just have to find a way to improve activities on our own,” he said.
He added that the problem has shifted from the impact of the pandemic to business challenges in the country. In view of this; he urged the government to prioritise the ease of doing business and also help manufacturers in terms of forex access.