ZIMBABWE’S manufacturing sector capacity utilisation stagnated to 48% at the end of the second quarter of the year compared to the first three months of 2022, as limited access to foreign currency and policy inconsistency continue to blight the sector’s recovery, a new study by the country’s statistical agency has shown.
BERNARD MPOFU
A sharp decline in agricultural output has resulted in most manufacturing firms accessing throughput offshore. This is compounded by the high cost of borrowing and limited access to cheaper lines of credit which have made most companies less competitive in the region.
According to the Zimbabwe National Statistical Agency (ZimStat)’s manufacturing and mining sector business tendency survey for the period under review, the three major constraints to production as cited by respondents were: shortages of raw materials; cashflow challenges; and the uncertainty of the economic environment.
The same were also cited as major constraints in the first quarter.
“Capacity utilisation for the manufacturing sector during second quarter 2022 was 48 percent, same as reported in the first quarter,” reads the report.
“The ‘Foodstuffs’ industry group recorded the highest capacity utilisation value of 58 percent, as the ‘Transport’ group booked the least utilisation value of 26 percent. The survey was undertaken with the objective of producing indicators for use in monitoring current business situation and short-term developments in the sector. This was based on views of senior managers of manufacturing and mining companies towards business conditions.”
The survey also shows that proportion of the surveyed manufacturers reporting an increase in production levels over the past three months was 14%.
Major contributors to the positive balance were manufacturers in the ‘Metals and Metal Products’ industry group.
Forty-two percent of the respondents were more optimistic towards an increase in production levels in the next 3 months “Manufacturing respondents’ views towards current levels of local order books were such that only 3% viewed them as being above normal for the season during the second quarter, while 54% indicated that they were normal for the season.
Current levels of export order books were regarded as above normal by 2% of the respondents,” ZimStat says.
“The outlook for changes in selling prices was such that 59 percent of the respondents in the manufacturing expected prices increases over the next three months.”
Variables from which opinions were sought included general business climate, capacity utilisation, production, employment, order books, inventories, selling prices, supplier delivery time as well as constraints to production.
Key indicators produced from the survey comprise Capacity Utilisation, Purchasing Managers’ Index (PMI), Manufacturing Confidence Index and Balance of Opinion or Net Balance.
