The manufacturing sector is showing a rapid decline as the latest Business Expectations Survey (BES) conducted by the Central Bank of Nigeria (CBN) involving 1600 businesses reveals that while many sectors were optimistic about the economy, the main sector, manufacturing, was notably pessimistic. The report conducted in August 2024 shows local manufacturers expressing a total lack of confidence in the nation’s economic outlook.
The survey conducted revealed that the manufacturing sector posted a negative confidence index of -5.5 points, reflecting ongoing concerns about the current business climate. The lack of confidence was reflected in sectors such as manufacturing, construction, mining and utilities with manufacturing and construction respectively showing negative indices of -5.5 and -10.0 points.
The negative sentiment could be attributed to several reasons as highlighted by the BES report including; insecurity, high interest rates and multiple taxation as the constraints to business activities. An unfavourable economic climate and insufficient power supply was also included in the report as part of the challenges being encountered by the business sector of the country making it difficult for manufacturers to maintain operations at optimal levels, eroding confidence in both current business conditions.
Sectors such as mining, quarrying and electricity however expressed optimism about their expansion plans for September, 2024 with an index of 30.4 points, highlighting the varied sentiments within sectors. The Mining and quarrying sector showed the highest growth potential, with an index of 66.7 percent, while manufacturing indicated a moderate interest in expansion with an index of 47.9 percent. August may have been gloomy for the manufacturing sector but September shows great promise and potential for businesses across all the various sectors.
According to the survey, the employment outlook for the month of September, 2024 was also positive across all sectors. The mining and quarrying sector being at the top showed the highest level of job creation across all sectors. The manufacturing sector is the lowest at 8.3 points, agriculture at 9.9 points, construction at 10.0 points and mining and quarrying with the highest index of 13.0 points.
