Manufacturers’ confidence in Africa’s most populous country has increased slightly in the fourth quarter of 2024 as consumer demand spiked during the festive season.

The aggregate Manufacturers CEOs Confidence Index (MCCI) from MAN rose by 0.5 points to 50.7 in the fourth quarter of 2024, up from 50.2 in the previous quarter. However, compared to the same period in 2023, the aggregate MCCI fell by 1.1 points from 51.8.

According to MAN’s Q4 report, current business condition, employment and production level indices recorded improvement due to the moderate increase in consumer demand, especially during the festive period.

logistics as the existence of high exchange rate, interest rate and inflation rate remained unfavourable to the overall business environment,” the report said.

Reading above 50 points indicates the expectation for economic expansion, while an index score of less than 50 suggests deterioration in the operating environment.

The report also projected that manufacturers’ confidence in the first quarter of 2025 declined but remained above the 50-point threshold.

“The projected business condition in Q1 2025 slid from 56 points to 53.2 points,” the report said. “The projected employment condition also dropped from 53.8 points to 53 points while the expected production level declined from 54.3 to 54 points.”

According to the report, the decline in the indices indicates that despite a predicted slowdown in business activity for the first month of 2025, operators remain moderately optimistic by the expectations of a more stable exchange rate, halt in interest rate hikes, minimal decline in energy prices and the enactment of favourable Tax Reform Bills by Q1 2025.

Across the sectoral groups, the reports showed that seven of the ten groups witnessed improvement in confidence levels, while three groups contracted.

The three contracted groups include Basic Metal, Iron & Steel, Electrical & Electronics and Non-Metallic.

The report added that the delay in the take-off of the Ajaokuta Steel Company and the Aluminum Smelter Company has rendered operators in the basic metal, iron and steel sectoral group highly dependent on metallic materials and vulnerable to FX volatility.

In industrial zones, only manufacturers operating in Ikeja, Kwara/Kogi, Apapa, Imo/Abia, Ogun, Abuja, Edo/Delta, Cross River/Akwa Ibom, and Oyo/Ondo/Ekiti/Osun recorded index scores above the 50-point standard in the quarter under review.