Zimbabwe manufacturing industry capacity utilisation falls to 45 percet

Capacity utilisation in Zimbabwe’s manufacturing sector declined from 47.4 percent last year to 45.1 percent in 2017, a survey by the Confederation of Zimbabwe Industries (CZI) has shown.

CZI chief economist, Daphne Mazambani said capacity utilisation had been constrained by high production costs and shortages of foreign currency.

The survey showed that capacity utilization in the non-metallic mineral sub sector which comprises of cement manufacturers and producers of clay and ceramic products declined from 57.5 percent to 33.2 percent.

The textile, clothing and footwear subsector was the only subsector which improved capacity utilization from 46 percent last year to 50 percent.

Mazambani said there was need to address the country’s cost structure in order to make locally made products competitive on the export market.

According to the survey the manufacturing sector exports less than 15 percent of its product.

“Addressing the cost of manufacturing is the most effective way of improving product competitiveness, and this should be done on policy and regulatory level as well as enterprise level,” she said.

The survey results show that 64 percent of raw materials are sourced locally, down from 84 percent in 2016, a situation which the governor of the Reserve Bank, John Mangudya said is putting pressure on foreign currency requirements.

South Africa remained the major source of raw materials, constituting 53 percent of total raw materials.

Employment in the sector is said to have declined by an average of 15 percent in 2017.- The Source

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