Manufacturers' CEOs Confidence Index Drops By 2.7% to 53.9 Points In Q1 2021

The Manufacturers Association of Nigeria (MAN) said the Manufacturers CEO’s Confidence Index (MCCI) stood at 53.9 points for the first quarter of the year, a 2.7 per cent decline against the 55.4 points achieved in the fourth quarter of 2021.

This was disclosed in the MCCI quarterly report released recently in Lagos.

According to the report, the MCCI figure had remained above the 50 neutral points since the second quarter of 2021.

The report explained that the decline recorded in Q1, 2022 still confirmed the sustained confidence of the sector in the economy despite the slight reduction in the performance in the quarter.

“Other factors are neglect of the economy for politics, acute shortage of foreign exchange, insecurity, and immediate impact of the Russian-Ukraine crisis on diesel, wheat and other imported manufacturing products.

“Overall, the score suggests fairly stable confidence in the economy, driven primarily by improvement in current business condition, though the performance was affected by declining employment and production conditions arising from familiar constraints.

“The general decline and the dimmed outlook for the second quarter evidenced by expectations of lower production, employment and unfriendly business condition, is a cause for concern.

“This calls for the crafting of a National Response and Sustainability Strategic Plan to avert the looming economic crisis and shortages that would arise from the impact of the Russia invasion of Ukraine.”

The report explained that findings from sector analysis had shown that operations of manufacturing concerns in the wood and wood products, electrical and electronics and motor vehicle and miscellaneous assembly groups were heavily challenged.

The index score of wood and wood products was 48.9 points; electrical and electronics were 49.9 points and motor vehicle and miscellaneous assembly were 49.2 points; all below the 50 base points.

This, according to the report, stressed the low confidence in the economy, poor performance and the struggling status of these manufacturing sectoral groups.

He said analysis based on industrial zones showed that out of the 13 industrial zones in the country; Bauchi, Benue, Plateau, Abuja and Rivers struggled in the first quarter of 2022.

The report noted that the performance of the afore-mentioned zones was depicted by the index scores of 48.3, 44.8 and 46.0 points respectively, which fell below the 50 neutral points threshold index score.

“In broad terms, the lacklustre performance recorded in Bauchi/Benue/Plateau, Abuja and Rivers industrial zones are attributed to the unbridled disruption of manufacturing activities by high insecurity, rising operating cost and the general manufacturing unfriendly environment.

“In specific terms, peculiar contributory factors for Rivers State include the prevailing low interest in the productive sector evidenced by the shrinking industrial landscape, low support for the manufacturing sector and the over-concentration on trade and services.”

The report said available facts and recent experiences showed that the emergence of a challenge in one country could become a major constraint with spiral effects for the entire world.

The learning curves from recent development included the need for leaders all over the world to jointly manage global peace and deepen the cord of interdependence of countries.