Effect of Selected Macroeconomic Variables on Manufacturing Sector Output in Nigeria

This study examines the effect of selected macroeconomic variables—exchange rate, interest rate, money supply, unemployment rate, and inflation rate—on the manufacturing sector output in Nigeria. The study employs an ex post facto research design and utilizes the Autoregressive Distributed Lag (ARDL) model for regression analysis to explore both short-run and long-run dynamics. The findings reveal that, in the long run, the exchange rate has a significant positive effect on manufacturing sector output in Nigeria, indicating that exchange rate stability fosters industrial growth. Conversely, inflation rate, money supply, and unemployment rate were found to have no significant effect on manufacturing output in the long term. Additionally, the interest rate was found to have a significant negative effect on industrial sector output, suggesting that high borrowing costs deter investment in the manufacturing sector. In the short run, the exchange rate, money supply, and unemployment rate were statistical