LARGE firms in the manufacturing and mining sectors recorded slight increases in capacity utilisation in the third quarter of 2023 while small operators saw a marginal retreat in output levels, the Zimbabwe National Statistics Agency (ZimStat) said.
In its Business Tendency Survey for the third quarter of 2023 for manufacturing and mining sectors, ZimStat said the 2023 third quarter capacity utilisation for large manufacturing companies was 56,8 percent, up from 54,7 percent in the second quarter of 2023.
The increase in capacity utilisation for large manufacturing and mining companies tallies with the general economic trajectory, which the Government expects to expand by 5,3 percent driven by agriculture, mining and construction.
“For small and medium companies in the sector, capacity utilisation for third quarter 2023 was 44,4 percent, (slightly) down from 44,7 percent recorded in second quarter 2023.”
Following the slowdown in capacity utilisation for small and medium manufacturing companies, the combined capacity utilisation for the third quarter of 2023 remained at 47,4 percent.
ZimStat also noted that for the mining sector, capacity utilisation was 52,6 percent, up from 51,1 percent in the second quarter.
This was a result of new mining operations that started production and the expansion of existing projects during the period.
“Concerning the third quarter 2023 level of order books, 55,5 percent of the respondents in the manufacturing sector had the sentiment that they were normal for the season. (In terms of) level of order books in the mining sector; 70,7 percent of the respondents were of the same view,” ZimStat said.
Zimbabwe’s manufacturing and mining sectors have continued to post modest recovery gains after being weighed down by Covid-19, but the increased availability of electricity and lifting of Covid-19 restrictions has driven production.
“45,2 percent of respondents in the manufacturing sector, viewed production levels as having remained unchanged during the third quarter 2023, when compared to the second quarter, whilst 22,4 percent were of the opinion that the levels had increased.
“For the mining sector, 45,7 percent of the respondents had the perception that production levels had remained almost the same in third quarter 2023, when compared to the second quarter,” the report read.
In the quarter under review, both manufacturing and mining sector respondents said employment levels remained the same quarter on quarter and they expect it to stay that way until the end of the year.
The Manufacturing Confidence Index (MCI) increased from 3,5 in second quarter 2023 to 8,3 in the quarter under review.
The MCI is a statistical measure used to assess the level of optimism or pessimism among manufacturers regarding the overall economic condition and business prospects within the manufacturing sector. A positive value reflects some optimism towards the business condition while a negative implies pessimism.
However, the manufacturing sector’s Purchasing Managers’ Index (PMI) for the third quarter 2023 was 39,6, reflecting a 0,5-point decrease from the second quarter 2023 value of 40,1.
PMI is a measure of the prevailing direction of economic trends in the manufacturing sector where values of the PMI index range from 0 to 100, with those above 50 reflecting a direction towards expansion of the sector and below 50 signifying a contraction.
There were three major constraints to production cited by respondents in both manufacturing and mining sectors namely shortage of power, cash flow challenges, and uncertainty about the economic environment that hindered growth of production. – Herald