Manufacturers adopt survival strategies to beat economic headwinds

Nigerian manufacturers have responded to the prevailing challenges in the nation’s economic environment by adopting innovative strategies and adjustments for survival.

The Manufacturers Association of Nigeria (MAN) disclosed this in its Manufacturers CEO’s Confidence Index (MCCI) Q2’22 report made available to media houses in Lagos.

MCCI is a quarterly research and advocacy publication of MAN, 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 direct survey on over 400 CEOs of MAN member-companies.

“In Q2’22, the MCCI marginally increased to 54.6 points, from 53.9 points recorded in the first quarter of the year, despite the plethora of challenges including poor access to foreign exchange for importation of raw materials that are not available locally, rising global inflation, aggressive drive for revenue by government, frequent collapse of the electricity grid, steady rise 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”.

With the aggregate MCCI score at 54.6 points, being above the 50 baseline points, the report said it shows that manufacturers still have minimal confidence in the economy, with the expectation of improvement in the operating environment.

The confidence of CEOs in the sector, the report stated, inched up 0.7 points to 54.6 points in the second quarter of 2022 (Q2’22) from 53.9 points in the previous quarter.

“The 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.

“This signifies that manufacturers responded to the economic challenges that prevailed in the quarter with appropriate survival strategies and adjustments including remodelling of production operations, after the marginal slowdown experienced in the first quarter,” the report further noted.