Home » Entertainment » CAPACITY UTILIZATION OF ZIMBABWE’S MANUFACTURING SECTOR DROPS TO 45.1 PCT

HARARE, Zimbabwe's manufacturing sector has seen its industry capacity utilization ratio declining 2.3 percentage points to 45.1 per cent this year as companies continued to face myriad challenges impacting their ability to produce and create jobs.

While the overall use of industrial capacity slipped, manufactured output for the period actually increased by 5.5 per cent on the back on investments by those companies which are enjoying economies of scale, according to the latest statistics from the Confederation of Zimbabwe Industries (CZI) released this week.

Th data also showed that the decline in the manufacturing sector capacity utilization led to a 15 per cent loss in jobs during the period. The decline (in capacity utilization) has been driven by sectors such as non-metallic mineral products, including cement, woods and furniture, as well as transport and equipment and petroleum products, said the CZI.

One major standout from the survey was that around 40 per cent of local companies were using equipment which are more than 20 years old. The age of equipment affects both the average and quality of capacity. The results show that the companies using newer machinery are operating at higher capacity than companies using older machinery, the CZI said.

Only 20 per cent were using equipment below five years old.

The top three challenges cited by industry players as affecting production were cost of raw materials, low local demand and foreign currency shortages. CZI president Sifelani Jabangwe lauded the government for interventions such as import bans which had assisted in the recovery of local industry.

Though the reported capacity utilization went down by 2.3 per cent, it does not mean that the state of health of the manufacturing sector has gone down, we need to read into this figure together with the increase in capacity investments and the growth of manufactured output of 5.5 per cent, he said.

Industry and Commerce Minister Dr Mike Bimha said it was imperative for industry to identify problematic competitiveness issues for the government to assist in provision of solutions. We need to focus on import substitution so that we will be able to generate foreign currency for our economy, Bimha said.

Reserve Bank of Zimbabwe Governor Dr John Mangudya encouraged the sector to do better, saying it was consuming more foreign currency than most sectors of the economy but was exporting less than 10 per cent of output.

Source: NAM NEWS NETWORK

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