The Manufacturers Association of Nigeria (MAN) has described the country’s manufacturing sector performance in the year 2019 as a mixed grill as the growth of the sector oscillated between negative and positive values in the first, second and third quarters of the year.
However, as the release of economic data from the National Bureau of Statistics for the fourth quarter of 2019 is being awaited, the association in its latest economic report for the 2019 fourth quarter review said available information from both Central Bank of Nigeria’s Purchasing Managers’ Index and MAN CEOs’ Confidence Index point to improved economic and manufacturing sector performances.
It stated that MAN CEO Confidence Index increased marginally to 51.9 points in the fourth quarter of 2019 as against 51.7 points recorded in third quarter, thus suggesting renewed confidence of manufacturers in the economy in the period.
According to the association, a major revelation from the report is the increase in current business condition from 41.5 points in third quarter to 55.6 points in fourth quarter 2019.
However, amidst this increase is also a significant decline in current employment from 42.3 points observed in third quarter to 36.2 points in fourth quarter 2019. MAN explained that the result indicates a slight improvement in the macro economy.
To this end, the association explained that there was still an urgent need to keep fine tuning policies and reforms that could lead to significant improvement in the performance of the manufacturing sector.
MAN alluded that this waa also corroborated by the CBN PMI, which shows that manufacturing sector performance averaged 59.4 points in the fourth quarter of 2019 as against 57.7 points recorded in the third quarter of the year.
MAN reported that the composite MCCI presented the picture of a sector that is still struggling to stay afloat as it remains precariously slightly above the minimum threshold of 50 points.
The MAN economic report indicated that economic activities began on a sluggish note in 2019 following the delay in passing the year’s appropriation bill into law, a scenario which made management of businesses difficult particularly with regards to timely preparation of manufacturing production plan that will reflect economic expectation in the year.
However, according to data released by NBS, the performance of the aggregate economy remained positive across the first three quarters of the year.
Although the association explained that inflationary pressure in the country from the first to third quarters of the years decelerated, the closure of land borders in the latter period of third quarter 2019 reversed the inflationary pressure upward in the fourth quarter.
“While we await the release of fourth quarter macroeconomic and GDP statistics, the pace of activities showed sign of hope as the year 2019 closed on a high economic performance,” the MAN report said.
Industry comprised of manufacturing, mining quarrying, electricity and water production. Manufacturing sector component of the industrial contribution was 8 74 in the third quarter of the year showing a marginal decline in the sector’s contribution to gross domestic product.
In the fourth quarter of 2019, MAN pointed out that the price of crude averaged $64 44 4 44 above the 60 per barrel specified in the 2019 budget.
This development alongside the continuous intervention of the CBN in the forex market contributed to the reduction in the country’s external reserve.