Low demand pushes confidence indices down
ZIMSTAT has said the business tendency survey for the services sector revealed that the confidence index for the transport and storage sector decreased from -39,9 in the 4th quarter of 2023 to -40,6 in the 1st quarter of 2024, citing insufficient demand as the major limiting factor for business expansion.
Confidence indices are compiled using an average of the balances of opinion on questions relating to the present business situation, the current level of total order books, the current level of stock, employment in the next three months, and business situation in the next three months.
Positive values of the indicator reflect optimism towards the business conditions while negative values imply pessimism and zero reflects a perception of no change in business situation.
“The confidence index for the transport and storage sector decreased from -39,9 in the 4th quarter 2023 to -40,6 in 1st quarter 2024, while those for construction and accommodation and food services sectors improved, from -50,1 to -46,3 and from -26,2 to -24,5 respectively, said ZimStat.
ZimStat said respondents in accommodation and food services and transport and storage sectors, cited insufficient demand as the major limiting factor for business expansion while those in the construction sector cited cost of materials.
“Sentiments regarding the current business situation were such that proportions of respondents who considered the general business climate as satisfactory were 19,6 percent in construction, 25 percent in transport and storage, and 41,3 percent in the accommodation and food services sector,” said ZimStat.
The statistics agency said in the accommodation and food services sector, 36,4 percent of respondents considered the financial situation of their establishments as satisfactory while 25 percent in transport and storage and 21,3 percent in the construction sector were of the same view.
Excluding normal seasonal variations, ZimStat said 61,2 percent of respondents in the construction sector considered their companies’ level of total order books to be below normal during the 1st quarter of 2024.
“During the 1st quarter 2024, around 77 percent of respondents in the accommodation and food services sector perceived access to bank credit as being difficult. Resultantly, the net balance of opinion was -71,5 percentage points,” said ZimStat.
“Excluding normal seasonal variations, 69,2 percent of respondents in the construction sector considered their companies’ technical capacity to be below normal during the first quarter of 2024.
“Proportions of respondents expecting the business situation to improve during 2nd quarter of 2024 when compared to 1st quarter of 2024, were 11,4 percent for construction, 20,3 percent for transport and storage, and 24.5 percent for accommodation and food services sector.”
In terms of employment, ZimStat said the proportions of respondents who regarded the number of people employed by their establishments as having remained unchanged during the quarter under review, were 71,4 percent for the accommodation and food services sector and below 50 percent for construction and transportation and storage sectors. —chronicle
