The Business Confidence Monitor report compiled by the Nigeria Economic Summit Group and Stanbic IBTC has revealed that Nigeria’s manufacturing sector recorded a poor business performance in January 2025.
According to the report, the manufacturing sector scored -0.66 on the Business Confidence Monitor (BCM) Index for January 2025.
It said the manufacturing sector had a negative performance alongside the non-manufacturing sector (-4.64), the Services sector (-1.40), and Trade (-0.84). it, however, said the sectors showed relative improvement compared to December 2024.
Conversely, the report showed that Agriculture recorded a positive performance with a BCM index of +10.86.
The report further noted that four of the manufacturing sub-sectors, Textile, Apparel, and Footwear; Chemical and Pharmaceutical Products; Plastic and Rubber Products; and Motor Vehicles and Assembly, which were assessed, recorded mildly negative outcomes, while the others underperformed.
It was noted that the Motor Vehicles and Assembly sub-sector “experienced a significant downturn.”
According to the report, the underperforming sub-sectors “struggled with high production costs, weak demand, and supply chain disruptions.”
The report highlighted subsectors with mildly negative performances to include Food, Beverages, and Tobacco; Plastic and Rubber Products; Non-Metallic Products; and Basic Metal, Iron, and Steel
These subsectors, it noted, recorded “weak positive performances, supported by stable domestic demand and seasonal business activities.
The report also indicated that there were mixed trends in the manufacturing sector’s key sub-indices, noting that the Business Situation Index of the Manufacturing sector declined to +21.55 in January, from +24.44 in December
The sector’s Investment Index dropped from +20.79 in December 2024 to -5.77 in January 2025.
In contrast, the Production Index rose significantly to +46.56 from +10.96 in December.
The Operating Cash Flow Index improved to +21.13 in January from +17.49. This is said to reflect higher output and better liquidity.
The report added that the Cost of Doing Business Index at +41.57 and the Price Index at -40.82, indicate “inflationary pressures and high interest rates.”
“Additional constraints included limited credit access (-5.62), weak exports (-3.55), and declining operating profits (-17.41). Despite signs of recovery, inflation, high financing costs, and supply chain disruptions remain key risks.
“To sustain business growth, manufacturers need policy support, improved credit access, and a stable exchange rate. Without strategic interventions, the sector’s recovery may remain sluggish,” the report further stated.
It also stated that Nigeria’s business environment began the new year on a positive note, amidst a weak recovery.
The report added that structural challenges in Nigeria’s business environment eased slightly, supporting the improved business performance observed during the month, but high financing costs remained a critical constraint on both current performance and future growth expectations in business activities generally.
