As the festive season nears, manufacturers in Nigeria are taking position to enjoy a seasonal boost leveraging increased demand, increased selling price and introduction of new products.
At this time manufacturers are ramping up production especially makers of essential items like food related products, beverage makers, makers of sanitizers, soaps, which have become priority following the outbreak of the COVID-19 pandemic, envelope and paper makers, etc.
Olawale Fadairo, a small scale seasoning and spice manufacturer said that his company has increased its production capacity as the festive season nears, noting that increased demand for the products is expected.
“People have started their shopping for the festive season and we have prepared ahead for that, other than the increase in demand, there will be an increase in prices of products which consumers will adapt to as precedence has shown from previous years,” he said.
While malls and shopping centers like Shoprite, Spar et cetera engage in discount prices for their customers during the festive season, prices of consumer goods ranging from foodstuff to cooking gas, beverages, etc. in the local market hikes.
He added that this is also the time to introduce new products into the market as well as other affordable alternatives of products to well-known brands as consumers shift loyalty based on their purchasing power.
Some top manufacturers are also using this season to actively push their products into the market leveraging affordability, good quality reputation, etc. like Dangote’s latest market entrant which is the Dansa Mima tomato paste.
Morufat Adeniji, who retails provisions said that the prices of her goods has increased as it is the trend mainly because of those who will give it out as gifts, she said however by the New Year prices will revert to normal or might even be lesser.
“Now producers are pressured to supply more and they tend to increase their charges coupled with the federal government restriction on some imported products, customers will buy it grudgingly because they have no choice,” she said.
Analysts at FBN quest in their monthly report also note that businesses will enjoy a small seasonal boost in December owing to the festive season as demand for products and services increase significantly in line with annual trends.
The anticipated boost for manufacturers was evident in the Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, as it expanded to 57.4 points in November from the 49.6 points recorded in October, according to data by FBN Quest and NOI.
According to the report, this optimal performance was due to the increased economic and commercial activity associated with the festive season as it draws near.
“The increase in the headline PMI posted last month was mirrored across all five sub-indices as the bustle around the festive season eclipsed -end demand,” the report stated.
With the PMI as a leading indicator of how the economy fared within a period, analysts’ project that the PMI performance driven by a seasonal boost will rub off on the economy will initiate an expansion in the GDP performance of Q4 2021.
“We have seen an improvement in the PMI compared to the previous quarter, so our expectation of the GDP is that it should be an improvement as well,” Yinka Ademuwagun, Investment & research analyst told BusinessDay.