CEM REPORT, MANUFACTURING | The Confidence Index of Manufacturers in the fourth quarter of 2022 declined by 0.4 points.
The Manufacturers CEO’s Confidence Index (MCCI) dropped to 55.0 points from the 55.4 points recorded in the third quarter of the year.
This is according to the Manufacturers Association of Nigeria’s (MAN) quarterly MCCI report presented on Wednesday in Lagos by Omotayo Okewunmi, MAN’s Public Relations and Communication Executive.
According to the report the decline can be traced to various factors from the increase in the Consumer Price Index (CPI), erosion in the Naira value and difficulty in sourcing foreign exchange for productive use.
Also, the high cost of energy, insecurity and the lingering Russian-Ukraine War are among the factors.
The 0.4 points decline underscores the persistent challenges and waning confidence of manufacturers in the economy in the fourth quarter of 2022.
Additionally, the report adds that employment decision by manufacturers was not easy due to the unpredictability and difficulty in macroeconomic movement.
“In summation, the fourth quarter of 2022 appeared more difficult to manufacturers than the level of hardship in the preceding quarter.”
Further analysis of the report showed that the index score of pulp, paper, printing and publishing (49.6 points) and motor vehicle and miscellaneous assembly (48.4 points) fell below the 50 benchmark points.
It added that the motorcycle sub-group of the motor vehicle and miscellaneous assembly had been facing domestic difficulty following the ban on motorcycles by various state governments.
“Consequent upon the above trends, it is crucially important for the government to have a shift toward a better exchange rate management.
“Government should also moderate the rising energy cost via better management of refined petroleum products imported into the country.
“These among other measures would help reduce the current high inflation eating up the working capitals of businesses including manufacturing in the economy,” it said.
The News Agency of Nigeria (NAN) reports that MCCI is a quarterly research and advocacy publication that measures changes in the pulse of over 400 Chief Executive Officers (CEOs) and trends in the manufacturing sector.
The MCCI index is computed using data generated on standard diffusion factors of business and employment conditions and production levels with a baseline score of 50 points.