Zim’s power shortage hinders production in major i...

Zim’s power shortage hinders production in major industries

**Power shortages have impacted negatively on Zimbabwe's manufacturing sector**

Audrey Galawu

The Zimbabwe Statistics Agency has reported that shortage of power, cash flow challenges and uncertainty towards the economic environment were major constraints to production in the manufacturing and mining sectors.

This comes as the manufacturing and mining sectors reported a decrease in the Mining Confidence Index from 12.7 percent in the second quarter to 4 in third quarter 2023.

The manufacturing sector performed better compared to the mining sector for the period under review.

The Manufacturing Confidence Index went up from 3.5 in second quarter to 8.3 in third quarter 2023 indicating more optimism about the business environment.

The Purchasing Managers’ Index for third quarter 2023 was 39.6, reflecting a 0.5-point decrease from the second quarter value of 40.1.

Third quarter 2023 capacity utilisation for large manufacturing companies was 56.8 percent, an increase from the second quarter value of 54.7 percent while for the mining sector, capacity utilisation was 52.6 percent, a decrease from 51.1 percent recorded in the second quarter.

In a Business Tendency Survey report, ZimStat reported that for small and medium companies in the manufacturing sector, capacity utilisation for third quarter 2023 was 44.4 percent from 44.7 percent with a combined 47.4 percent capacity utilisation.

“About 43 percent of respondents in the manufacturing sector are expecting an increase in production levels during the fourth quarter 2023.

“About 78 percent and 73 percent of the respondents in the repairs and other manufacturing products sub-sectors respectively, have the perception that the production level would remain unchanged over the fourth quarter of 2023, while about 27 percent and 20 percent of those in non-metallic and paper and printing and other manufactured products sub-sectors, respectively, are expecting a decrease in production level.

“In the manufacturing sector, 25.3 percent of the respondents showed more optimism towards the general business climate for third quarter 2023. In the mining sector, 23.9 percent were of the same view.

“About 45.2% of respondents in the manufacturing sector viewed production levels over the third quarter 2023 as having remained unchanged, while 22.4% were of the opinion that the levels had increased.

For the mining sector, 45.7% of the respondents had the perception that production levels had remained the same over third quarter 2023,” reads the report.

Meanwhile, 64.3% of respondents in the manufacturing sector and 53.3% in the mining sector are anticipating prices to remain unchanged in the fourth quarter.

All industry groups, except Repairs of Machinery and Equipment, chemicals and clothing and footwear, are anticipating positive net balances in relation to expectations towards changes in selling prices for the 4th Quarter.