According to the report, the decline in MCCI points recorded in the first quarter of the year was not unconnected with the eroding purchasing power of consumers and the neglect of the economy for politics.
It read in part, “Contributory factors to the decline in the Index score for the First Quarter, 2022 include: eroding disposable income of consumers, high-interest rate, excessive drive for revenue by government, and obvious neglect of the economy for politics.
“Others are the persistent acute shortage of forex; insecurity, the immediate impact of the Russia invasion of Ukraine as seen in the hike in the price of diesel, wheat and other imported manufacturing inputs.”
The MCCI of the Manufacturers Association of Nigeria is quarterly research and advocacy publication of the association, which measures changes in pulse of operators and trends in the manufacturing sector quarterly, in response to movements in the macroeconomy and government policies using primary data mined through a direct survey of over 400 chief executive officers of MAN member-companies.
According to the report, since the second quarter of 2021, the MCCI score had remained above the 50 neutral point, reaching 55.4 points in the fourth quarter. The score indicated sustained confidence of manufacturers in the economy and improved manufacturing performance over the period, the report said.
The index of score of the first quarter of 2022, however, stood at 53.9 point, which is a decline of 1.5 point from 55.4 point index score of the fourth quarter of 2021. The slight decline still confirms sustained confidence of the sector in the economy despite a slight reduction in performance in the quarter.
The Aggregate MCCI score declined to 53.9 points in Q1 2022 from 55.4 points recorded in Q4 2021. On the overall, the score suggests fairly stable confidence in the economy driven primarily by improvement in the current business conditions. But the performance was affected by declining employment and production conditions arising from familiar supply-side constraints.
The general decline in the index point and the dimmed outlook for the second quarter evidenced by expectations of lower production, employment and the unfriendly business condition is a cause for concern, it noted.
According to the manufacturers, “this obviously calls for the crafting of a National Response and Sustainability Strategic Plan to avert the looming economic crisis and shortages that would arise from the impact of the Russia invasion of Ukraine.”