The Herald (Zimbabwe)

Industrial, mining firms capacities surge in Q3

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.