In the second quarter of 2023, the manufacturing sector’s real GDP growth stood at 2.20% on a year-on-year basis.
This was a decrease compared to the same quarter in 2022, but an increase of 0.81% points from the previous quarter and 0.59% points from the quarter before that.
On a quarter-on-quarter basis, the sector experienced a contraction with a growth rate of -14.98%.
The sector’s contribution to the real GDP in the second quarter of 2023 accounted for 8.62%, marking a decline from the 8.65% recorded in the second quarter of 2022, as well as a drop from the 10.13% recorded in the first quarter of 2023.
In terms of nominal GDP growth, the manufacturing sector saw a significant increase of 29.90% on a year-on-year basis during the second quarter of 2023.
This was notably higher than the figure of 5.21% recorded in the corresponding period of 2022, showing a substantial growth of 24.69% points.
Additionally, it also surpassed the previous quarter’s figure of 17.85% by 12.05% points.
However, the sector experienced a decline in growth on a quarter-on-quarter basis, registering -5.76% during the quarter.
The manufacturing sector’s contribution to the nominal GDP for the second quarter of 2023 was 14.55%, which was an increase from the corresponding period of 2022 (12.97%), but a decrease from the first quarter of 2023 (15.70%).
The Manufacturing sector comprises industries in cement production, beverages, oil refining, food, tobacco, textile, rubber processing, footwear, paper, chemical and pharmaceutical production etc.
The drop in the manufacturing sector’s contribution to real GDP does not come as a surprise considering the harsh macroeconomic environment it operated in during the quarter.
High energy costs, a hike in the exchange rate, higher interest rates and an increase in the cost of importing raw materials meant that many had to reduce production and saw reduced margins.
Beyond that, there has been a perennial call by manufacturers for the FG to address issues relating to multiple taxation, monetary policy and power in the country.
