Manufacturing rebounds as unsold inventory dips 33.4%

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Inventory of unsold manufactured products dipped by 33.4 per cent to N384.58 billion in 2021 from N577.61 billion recorded in 2020, signalling a rebound of the manufacturing sector in the aftermath of the COVID-19 pandemic.

The Manufacturers Association of Nigeria (MAN) has released data reports revealing that the manufacturing inventory of unsold finished products in key segments dipped to N169.75 billion in the second half of 2021 (H2’21) from N303.22 billion recorded in the corresponding half of 2020 (H2’20), indicating 44 per cent decline over the period.

It also showed a 21 per cent decline when compared with N214.83 billion recorded in the preceding half (H1’21).

MAN attributed the decline in inventory in the period under review to the recovering aggregate consumption following the gradual rebounding of economic activities as the COVID-19 pandemic abates.

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Analysis across sectoral groups shows that inventory of unsold manufactured goods declined in most of the sectors in H2’21.

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In the Food, Beverage & Tobacco group, unsold inventory declined by 7.76 per cent to N63.82 billion in 2021 as against N69.19 billion recorded in 2020. In H2’21, it declined by 53 per cent to N18.94 billion H2’21 from N40.30 billion recorded in H2’20, and also declined by 57.8 per cent when compared with N44.88 billion recorded in H1’21.

Unsold inventory in the Chemical and Pharmaceutical group declined by 29.4 per cent to N93 billion in 2021 from N131.78 billion in 2020. In H2’21, it declined by 53.7 per cent to N31.68 billion from N68.37 billion recorded in the H2’20, and by 48.3 per cent when compared with N61.32 billion recorded in H1’21.

However, unsold inventory in the Basic Metal, Iron & Steel, and Fabricated Metal group increased by 26.4 per cent to N55.34 billion in 2021 from N43.77 billion in 2020.

Similarly, in the Domestic and Industrial Plastic group, unsold inventory increased by 27 per cent to N57.78 billion in 2021 as against N45.49 billion in 2020. Reviewing the performance, MAN President, Engr. Mansur Ahmed stated: “Notwithstanding the improved performance of the manufacturing sector during the year, it is still far beyond its potential growth and contribution to national output due to almost innumerable challenges confronting the sector.”