Manufacturers’ confidence in Nigeria’s economy eases for the first in 2024 on worsening macroeconomic challenges.
The Manufacturer Association of Nigeria (MAN) CEOs Confidence Index (MCCI) declined by 1.6 points to 51.9 in the second quarter of 2024 from 53.5 points in the first quarter of 2024, according to MAN’s second quarter survey released Wednesday.
Reading above 50 points indicates the expectation for economic expansion, while an index score less than 50 suggests deterioration in the operating environment.
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The report noted that major performance indicators of the manufacturing sector all recorded unfavorable changes.
“The decrease is majorly attributed to the current performance of diffusion factors,” MAN said in the report.
“The indicators for the current business and employment conditions further declined below the 50-point benchmark, dropping from 46.8 points and 47.5 points in the first quarter of 2024 to 43.9 points and 47.2 points in Q2 2024, respectively,” it stated.
MAN added that the index of the current production level also fell from 52.8 points to 49.7 points, which underscores a decline in manufacturers’ confidence regarding production levels during the period reviewed.
The report attributed the deterioration of the three indices to the excessive increase in electricity tariff, the aggressive hike of interest rates, the high exchange rate and the persistent inflationary pressure.
The report added that the recurrence of fuel scarcity and the disruptive effect of industrial action observed by the National Labour Congress are responsible for the decline in manufacturers’ confidence.
Across the sectoral groups, the reports showed that seven of the 10 sectoral groups recorded lower confidence levels when compared to the first quarter of 2024.
However, the chemical and pharmaceutical, motor vehicles and miscellaneous assembly sectoral groups’ confidence for the period increased.
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In industrial zones, Kano(40), Rivers/Bayelsa (44.7), Bauchi/Benue/Plateau (45), Anambra/Enugu (48.1), Oyo/Ondo/Ekiti/Osun (48.8) industrial zones have low confidence in the economy as the five zones recorded indices less than the 50 points threshold.
“Undoubtedly these sectoral groups were more affected by the harsh economic conditions that prevailed in the second quarter of 2024
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