*Average CEO’s confidence index rises 1.4pts
*Production, distribution costs up 0.4pts
*Capacity utilization down 2pts
By Yinka Kolawole
The Chief Executive Officers (CEOs) under the aegis of Manufacturers Association of Nigeria (MAN) has expressed improved confidence in the nation’s economy amidst a mixed operating environment in the fourth quarter of 2021 (Q4 ’21).
The CEOs’ optimism was revealed in the Manufacturers’ CEOs Confidence Index (MCCI) Q4′ 21 report released over the weekend.
MCCI is an index constructed by MAN to measure changes in the quarterly pulsation of manufacturing activities in relation to movement in the macroeconomy and government policies.
The MCCI survey covered 400 CEOs of MAN member companies.
According to the report, the aggregate MCCI score increased to 55.4 points in the quarter under review (Q4 2021) from 54.0 points obtained in the preceding quarter (Q3), indicating the growing confidence of manufacturers in the economy.
Aggregate MCCI is an average of observed and projected changes in Business Conditions, Employment and Production levels in the economy from the perspectives of manufacturers.
The report stated: “Index for Current Business Condition increased by 1.15 points in the quarter under review from 50.3 points recorded in the third quarter of the year.
“Similarly, Index for Business Condition for the next three months increased by 3.2 points in the quarter from the 55.8 points obtained in the preceding quarter.”
It further said: “In the quarter under review, the perspectives of CEOs on the state of manufacturing operating environment revealed mixed grilled performance; encouraging but slow positive growth; over-regulated, high cost and manufacturing unfriendly environment.
“On the high side, CEOs affirmed gradual reduction in inventory of unsold finished goods; improvement in local sourcing of raw materials and patronage of made in Nigeria goods.
“On the low side CEOs confirmed that issues of multiple and duplication of regulation, which often find expression in the excessive drive for tax revenue instead of widening the tax net; unfriendly tax practices of government agencies; poor access to the national ports leading to the high cost of clearing cargo and transporting goods are seriously impeding the performance of the manufacturing sector.
“The effect of the macroeconomic environment that prevailed in the quarter under review was overwhelming in differing magnitudes on key manufacturing indicators such as production and distribution costs; Capacity utilization; Volume of production; Investment; Employment; Sales volume; and Cost of shipment. “Clearly, this further strengthened the perception of a mixed grilled performance, visibly exposed the hotspots and served as a pointer to the fact that the sector is still challenged and requires comprehensive policy support.”
Additionally, the manufacturers noted, “the Index for Current Employment (Employment Rate) increased by 3 points in the quarter under review from 47.6 points obtained in the third quarter of the year.
“In the same vein, Index for Employment Condition for the next three months increased by 2.1 points from 52.3 points recorded in the preceding quarter.”