Zim business sentiment 'hit all-time low'

HARARE - The Confederation of Zimbabwe Industries (CZI) says business sentiments in the country have reached an all-time low due to the deteriorating economic situation.

Launching CZI’s Business Confidence Index (BCI) — which assesses the level of confidence in the industry and strength of the institutions — in the capital yesterday, CZI President Busisa Moyo said “business sentiment is lower than the previous years”.

“This is the BCI for the second quarter of 2015, and the majority of the indices showed that things are worse than they were last year during the same period, however, going forward, most companies believe things will take a turn for the better in 2016,” he said.

The project, done in conjunction with the International Trade Centre and the European Union, would be conducted every quarter with the industry body measuring perception in local companies.

In its survey, the CZI profiled 322 companies in the BCI sector with the results being segmented by region and what is referred to as a refined Purchasing Manager’s Index (PMI).

The results showed that Bulawayo was the least positive region in the country in terms of business confidence, while the Midlands province performed fairly well in almost all the variables assessed.

“Business people are slightly negative, but indications are that the pessimism is markedly less with the bigger companies. Very few people think that the economy will improve as a whole,” the CZI boss said.

In the PMI, the country scored 43,1, a figure hovering close to the recessionary indication figure of 42.

“The figure 43,1 is very worrying as it means the country is currently very close to the recessionary indication of 42.

“However, since we had not carried such surveys previously it is difficult to determine if the figure shows a downward or upward trajectory,” said Moyo.

The PMI showed the textiles industry as the most promising sector in industry, while the BMI showed that the majority of Zimbabwean companies admitted they were operating below optimum capacity.

This comes as Moyo recently said capacity utilisation for the manufacturing sector was likely to remain flat on last year’s figure of 36,3 percent.

Capacity utilisation for the sector took off from 10 percent in 2008 to 30 percent in 2009, then 43,7 percent in 2010 and 57,2 percent in 2011.

Then it declined to 44 percent in 2012 due to the low performance of the economy, and further slumped to 39,6 percent in 2013.

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