This paper examines the manufacturing capacity utilization on Nigeria’s economy using Gross Domestic Product (GDP). The study further looked at the relation between capacity utilization (CU), manufacturing productivity index (MPI) and gross domestic product in the period under review. Secondary data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin and other relevant government agencies for the period covered in the study, 1981-2021. The data were analyzed using econometric model with the aid of E-views 8. The results showed that a strong positive and significant relationship exist between economic growth and manufacturing capacity variables used. However, it was recommended that the government should hereby embark on core industrial project to facilitate local supply of raw materials and intermediate products that would bring about the much-needed backward integration in the economy. Improved local sourcing of raw materials will undoubtedly reduce cost of production and boost employment generation, thereby making locally manufactured products’ price competitive, both in the local and international markets