By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has disclosed that its Aggregate Index Score (AIS) of Manufacturers CEO’s Confidence Index (MCCI) declined to 55.0 points in the fourth quarter of 2022 from 55.4 points recorded in third quarter of the year.
According to the report, the fourth quarter of 2022 was adversely affected by escalation in the Consumer Price Index (CPI), continuous erosion in Naira value and difficulty in accessing forex, high cost of energy, persisting insecurity and the consequences of lingering Russian-Ukrainian war.
The Association noted that these issues among others were principally responsible for the difficult operating environment and its declining implication on manufacturing activities in the country during the quarter under review.
“The Aggregate Index Score (AIS) of MCCI declined to 55.0 points in the fourth quarter of 2022 from 55.4 points obtained in third quarter of the year.
“The index score of the current quarter though below that of the previous quarter, indicates that manufacturers generally still have confidence in the economy.
“Across Sectoral groups however, activities in the Pulp, Paper, Printing & Publishing with index score of 49.6 points and Motor Vehicle & Miscellaneous Assembly (48.4 points) are negatively affected by the harsh operating environment in the quarter under review as their index scores fell below the 50 base points.
“Similarly, among industrial zones, activities in Rivers/Bayelsa (48.0 points) and Cross-Rivers/Akwa-Ibom (46.5 points) zones were depressed by high-cost of operating environment in the fourth quarter of 2022 as underlined by their index scores which fell below the benchmark points.
Consequent upon the above trends, MAN advised that it was crucial for the government to have a shift towards a better exchange rate management; and moderate the rising energy cost via better management of refined petroleum products imported into the country. The association said these among other measures would no doubt help to reduce the current high inflation, which is fast eating-up the working capitals of businesses including manufacturing in the economy.
The MCCI of the Manufacturers Association of Nigeria (MAN) is a quarterly research and advocacy publication of the Association that measures changes in pulse of operators and trends in the manufacturing sector quarterly, in response to movements in the macroeconomy and Government policies using primary data generated from direct survey of over 400 Chief Executive Officers of MAN member-Companies.
MCCI Index is computed using data generated on standard diffusion factors of Current Business Condition, Business Condition for the next three months, Current Employment Condition (Rate of Employment), Employment Condition for the next three months and Production Level for the next three months. The Index has a baseline score of 50 points and scores above the baseline indicate improvement of manufacturers confidence in the economy, while index score of less than the baseline suggests deterioration in the operating environment.