The over 400 Chief Executive Officers of MAN member-Companies of Manufacturers CEO’s Confidence Index (MCCI) of the Manufacturers Association of Nigeria (MAN) which measures changes in pulse of operators and trends in the manufacturing sector quarterly has disclosed that in the Second quarter of 2022, the Index of Aggregate MCCI marginally increased to 54.6 points up from 53.9 points recorded in the first quarter of the year.
The report, in response to movements in the macroeconomy and Government policies showed that despite the plethora of challenges including poor access to Forex for importation of raw materials not available locally, effect of rising global inflation, aggressive drive for revenue by Government, frequent collapse of the Grid, increase in price of diesel, scarcity of wheat and other manufacturing inputs due to the ongoing war in Europe and wide spread insecurity that combined to limit productive activities in the economy during the quarter observed that in the last 6 six quarters beginning from the second quarter of 2021, manufacturers have sustained improved confidence in the economy as index scores remained above the 50 baseline points.
MCCI Index administer 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 report disclosed that the index has a baseline score of 50 points and scores above the baseline indicate improvement in manufacturers’ confidence in the economy, while index score of less than the baseline suggests deterioration in the operating environment.
The over 400 Chief Executive Officers of MAN member-Companies report meagre improvement in the index score in the second quarter of 2022 implies that manufacturers’ confidence in the economy slightly improved above what obtained in the preceding quarter. Signifying that manufacturers responded to the economic challenges that prevailed in the quarter with appropriate survival strategies and adjustments including remodeling of production operations, after the marginal slowdown experienced in the first quarter.
The MCCI score increased to 54.6 points in the Second Quarter of 2022 from 53.9 points of the first quarter of the year. In addition to the survival strategies adopted by manufacturers that improved production, the increase in the Aggregate Index score was attributed to the feedback on the anticipated improvement in business condition, employment condition and production level in the third quarter of the year. Noteworthy, is the fact that business condition in the quarter under review was more challenging than what obtained in 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 due to compelling adjustments made by Government, manufacturers and households in response to general increase in price, forex shortage, increasing cost of energy, scarcity of raw materials and many more, thrown up by the war in Europe, report added.