The Manufacturers Association of Nigeria (MAN) has pegged its Manufacturers CEO’s Confidence Index (MCCI) at 54.6 points for the second quarter of 2022.
This is against the 53.9 points achieved in the preceding quarter, translating to an increase of 0.7 per cent.
The association made this known in its MCCI quarterly report made available by Mrs. Omotayo Okewunmi, Public Relations Officer, MAN, on Monday in Lagos.
The newsmen report that the MCCI with a baseline of 50 points is used to measure changes in pulse of operators and trends in the manufacturing sector in response to movements in the macroeconomy and government policies.
This is achieved using primary data mined through the direct survey on over 400 Chief Executive Officers of MAN member companies.
The report attributed the increase to the anticipated improvement in business conditions, employment conditions, production level in the third quarter of the year and survival strategies adopted by manufacturers.
It noted that the marginal increase was achieved in spite of the plethora of challenges facing the sector.
Some of which, it said, included poor access to foreign exchange, unavailable raw materials, rising inflation, frequent collapse of the national grid, increase in the price of diesel, and scarcity of wheat and other manufacturing inputs.
It, however, noted that business condition in the quarter under review was more challenging when compared with the first quarter of the year just as employment condition worsened.
“Nevertheless, the operating environment in the quarter under review was fairly better than the condition in the preceding quarter.
“This is due to compelling adjustments made by government, manufacturers, and households in response to general increase in price, foreign exchange shortage, increasing cost of energy, scarcity of raw materials and many more, thrown up by the Russia-Ukraine war,” it said.
Findings from the sectoral analysis showed that the index score of wood and wood products was 49 points in the second quarter of the year; a marginal uptick from 48.9 points obtained in the first half of the year, though below the 50 baseline points.
Similarly, the index score of the electrical and electronics group improved to 50 points from 49.9 points, and that of motor vehicle and miscellaneous assembly moved above the baseline to 50.1 points from 49.2 points in the preceding quarter.
“Activities in the wood and electrical sectoral groups signaled an improvement in spite of the fact that the operations of the groups were most impeded by an unfriendly operating environment.
“However, the motor vehicle and miscellaneous assembly group appeared to be gradually finding its footing back after operational difficulty in the first quarter of the year,” it said.
The association said that the Russian-Ukraine war clearly underscored the popular maxim that the world has become a global village.
The development, it said, demanded that governments should begin to take drastic measures to manage these phenomena proactively going forward.
“The aggregate MCCI score of 54.6 points shows that manufacturers still have minimal confidence in the economy, with the expectation of improvement in the operating environment.
“The business ambiance in the second quarter was no doubt beset by numerous macroeconomic, regulatory and externally induced challenges, compounded by the lingering backlashes of COVID-19 pandemic and the ongoing Russian-Ukrainian war.
“It is, therefore, important for the government to intentionally create an anticipatory policy framework to facilitate automatic stabilization of the economy in the event of domestic or global shocks while addressing the afore-mentioned familiar operating challenges limiting the performance of the sector,” it said.