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CZI projects flat capacity utilisation

Business
Capacity utilisation for the manufacturing sector is likely to be flat on last year’s figure of 36,3% as the sector is beset by a host of challenges, the Confederation of Zimbabwe Industries (CZI) has said.

Capacity utilisation for the manufacturing sector is likely to be flat on last year’s figure of 36,3% as the sector is beset by a host of challenges, the Confederation of Zimbabwe Industries (CZI) has said.

BY MTHANDAZO NYONI

Every year, CZI undertakes a survey of the production capacity of the country’s manufacturing sector and its report is the most comprehensive private-sector led survey, which assesses industrial performance. This year’s report will be launched on October 28.

CZI president Busisa Moyo told delegates at a pre-2016 National Budget consultation organised by the Zimbabwe National Chamber of Commerce on Monday that the body was currently busy analysing findings of the survey. He said the findings showed that “business sentiment is lower than the previous years”.

“At the moment, we are finalising it but preliminary sort of flash results show that the performance in several sectors has gone down but in others it has gone up. So we are just waiting to see the empirical effects of that. However, as you know, our last report on capacity utilisation in the manufacturing sector was 36% and that was very low and we do not see that improving. We see it flat..,” Moyo said.

Moyo said companies were faced with a plethora of challenges such as the liquidity crunch, power outages, smuggling, increased foreign competition and low consumer demand.

Capacity utilisation for the sector took off from 10% in 2008 to 30% in 2009, then 43,7% in 2010 and 57,2% in 2011. It declined to 44% in 2012 due to the low performance of the economy, further decelerating to 39,6% in 2013.

The 2014 CZI report showed key challenges that affected industry included working capital constraints, power and water shortages and high costs, ageing equipment and machine breakdowns and low domestic demand.

Analysts say the manufacturing survey report is a mirror image of the state of the economy.

Meanwhile, CZI will today launch its Business Confidence Index which assesses the level of confidence in the industry and strength of the institutions. Moyo said the results were segmented by region and what is also included is a refined purchasing manager’s index.