Time-Series Analysis of Industrial Sector Performance and Economic Growth in Nigeria: A Disaggregated Approach

Abstract

This study investigated the impact of industrial section performance on economic growth in Nigeria. Specifically, the study examined the impact of manufacturing sector output, mining and quarrying sector output, utility sector output and construction sector output on economic growth proxied by per capital real gross domestic product in Nigeria. Phillips-Perron unit root test, Johansen cointegration test and error correction mechanism (ECM) were applied on annual time-series data for the period 1981 to 2019. The findings indicated a long-run relationship between industrial sector performance and economic growth. The estimated long-run regression result showed that manufacturing, and mining and quarrying subsectors make significant contribution to economic growth while utility and construction subsectors have insignificant positive impact on economic growth in Nigeria. The short-run (ECM) regression result showed that the outputs of the manufacturing, mining and quarrying, construction and utility sectors all have insignificant positive impact on economic growth. Among other things, it is recommended that there should be a general improvement in the productive capacity of the industrial sector to enhance its contribution to economic growth.