Manufacturers experience stagnant growth in Q4 2024

MANUFACTURERS experienced stagnant growth during the fourth quarter of 2024, as the perception towards the business climate continued to remain negative, a new report shows.

According to the Zimbabwe National Statistics Agency’s (ZimStat) Manufacturing and Mining Sectors Business Tendency Survey for the Fourth Quarter 2024 report, the Manufacturing Confidence Index decreased to -4,6 during the period under review from 2,1 in the third quarter.

“Three major constraints to production cited by respondents in both the manufacturing and mining sectors were cash flow difficulties, shortage of electricity and uncertainty of the economic environment,” ZimStat said.

The Manufacturing Sector’s Purchasing Managers’ Index (PMI) during the period was 35,9, reflecting a 0,9 point increase from the third quarter value of 35.

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“Fourth quarter 2024 capacity utilisation for large manufacturing companies stood at 57,9%, from the third quarter 2024 value of 57,5%,” ZimStat said.

“For small and medium companies in the sector, capacity utilisation for fourth quarter 2024 was at 46,2%.

“Overall, the manufacturing sector’s combined capacity utilisation in the fourth quarter was 47,9%, from 47,1% in third quarter 2024.”

The statistics agency added: “This report presents results of the Business Tendency Survey conducted for the manufacturing and mining sectors covering the period October-December 2024.

“The survey objective is to produce indicators for use in monitoring current business situation and short-term developments in manufacturing and mining sectors.”

ZimStat said the views on business performance during the fourth quarter of 2024 and expectations for the first quarter of 2025 were sought from respondents of 430 manufacturing companies and 83 mining companies.

“The response rates were 59,6% for manufacturing sector and 65,3% for mining sector, giving a combined response rate of 60,1%,” Zimstat said.

In the manufacturing sector, the report showed that only 19,8% of the respondents expressed more optimism towards the general business climate in the fourth quarter of 2024.

“Overall balance of opinion for general business climate in the manufacturing sector during the quarter under review was -1,6 percentage points (pp), down from 0,0 pp in third quarter 2024,” ZimStat said.

The agency noted that about 40% of respondents in the manufacturing sector viewed production levels over the fourth quarter of 2024 as having remained unchanged, with 19,3% being of the view that the levels had increased.

“Balance of opinion for change in production levels during the fourth quarter 2024 was -21,2pp for the manufacturing sector and -13,3pp for the mining sector. The Food Stuffs sub-sector’s balance of opinion increased from -10,2pp to 3,7pp in fourth quarter 2024,” ZimStat said.

Twenty-seven percent of respondents in the manufacturing sector were expecting an increase in production levels during the first quarter of 2025, according to the report.

“The outlook for changes in selling prices in the first quarter of 2025 was such that 64,7% of respondents in manufacturing anticipated the prices to remain unchanged,” ZimStat said.

“In relation to supplier delivery time, the manufacturing sector recorded a negative fourth quarter 2024 balance of opinion of -16,0pp.”-ewda