Why Did The Manufacturing Industry Suffer Negative Growth In The First Quarter?

According to Nigeria Daily News reported on May 30th, although the purchasing managers' index (PMI) continued to grow for 26 consecutive months, the manufacturing industry experienced a negative growth in the first quarter of 2019 as a result of the campaign.

MudaYusuf, director general of LCCI, said that the performance of gross domestic product in the first quarter of 2019 was not surprising because there was little economic activity during the campaign.

He pointed out that regardless of the political environment, the continuous improvement of the business environment and government institutions will ensure sustained economic activity.

Yusuf said that the problem of operation, production and pportation costs in PMI growth needs to be resolved so that it can be successfully pformed into economic growth.

He is optimistic that the manufacturing sector will increase as a result of the anticipated improvement in consumption expenditure due to the implementation of the new minimum wage and budget.

HammaKwajaffa, director general of the Nigeria Textile Manufacturers Association (NTMA), said that despite the high purchasing managers' index, the rising level of unsold inventory is a problem that affects the growth of the industry.

Kwajaffa said many manufacturers are facing the challenge of being unable to sell products due to low purchasing power and poor economic conditions.

He pointed out that the problem was reflected in the decline in the PMI index of new orders and raw materials inventories.

Kwajaffa urged the government to tackle the challenge of insufficient power supply, which currently accounts for about 35% of the cost of electricity.

In addition, economist AkinAkinbiyo said that without strong policy push, economic integration could be threatened.