The Manufacturers Confidence Index (MCCI) is an index created by the Manufacturers Association of Nigeria (MAN) to gauge the change in quarterly pulsation of manufacturing activities to changes in the macroeconomic ambience and Government policies. According to the report, MAN used the MCCI report as the perceptions of Members CEOs of manufacturing companies to measure any changes in the economy.
The report stated that the performance of the economy in the second quarter of 2021 consolidated on the achievement made in the first quarter after a very difficult period accessioned by the onslaught of COVID-19 pandemic. The report further noted that in the quarter under review, businesses activities appeared to have further stabilized.
Consequently, even though the macroeconomic variables (exchange rate, lending rate and inflation rate) are still very much unfavourable, businesses are able to maintain operation, particularly at the level it was in 2019 before COVID-19 came in 2020. On account of the improved economic tranquility, Aggregate MCCI increased to 52.9 points in the Second quarter of 2021 from 49.1 points recorded in the first quarter of the year.
The report disclosed that was the first time the index value reach and exceeded the 50 neutral points since the First quarter of 2020 when it recorded 44.4 points, thus, suggesting that the macroeconomic ambience improved in the second quarter of 2021.
In summary, the performance shows an improvement in the confidence of manufacturers in the economy.
Above all, Association stated that the performances of the individual Diffusion Factors mimicked the Aggregate score except the index of Current Employment which recorded 48.3 points in the quarter under review from 39.7 points observed in the preceding quarter. Although, the index of Current Employment is still below the 50 neutral points, it improved by 8.6 points.
However, the performance indicated that employment in the sector was still sluggish in the second quarter of the year. While, Current Business Condition scored 50.8 points in second quarter of the year as against 46.7 points recorded in the preceding quarter, thus, indicating 4.1 points increase over the quarters. It was disclosed that was the first quarter that Current Business Condition scored over the 50 neutral points from the first quarter of 2020.
Also Index of Business condition for the next three months also increased to 54.9 points int the second quarter of 2021 from 53.4 points recorded in the preceding quarter; thus, indicating 1.5 points increase over the quarters. In the same vein, Index of Employment condition in the next 3 months increased to 50.7 points in the second quarter of the year from 47.1 points scored in the preceding quarter. That was the first time the Index of Business Condition for the next 3 months scored above the 50neutral point since the fourth quarter of 2019.
“Index of Production for the next 3 months increased to 60.2 points in the second quarter of 2021 from 58.7 points recorded in the preceding quarter, thus, indicating 1.5 points increase over the quarter. The improved scores of the Indexes support the continuous improvement in the macroeconomy following the economic devastation by the COVID-19 pandemic.
MAN noted that the confidence of the manufacturers on the economy gradually improves, it is important that the identified challenges of the sector are adequately addressed so as to continue to advance the momentum of manufacturing in the country.
“Consequently, the index performance underpinned the improvement in the confidence of manufacturers on the economy, although much is still required to ensure that the current momentum in the economy is sustained and improved upon. Therefore, this report provided critical recommendations that addressed the various challenges of the manufacturing sector as identified by manufacturers in the quarter under review. We believe that with the ardent implementation of the recommendations, there would be significant positive change in the business operating environment in the country.