Manufacturing sector capacity utilisation down to 39.6% in 2013

Manufacturing sector capacity utilisation down to 39.6% in 2013
Published: 02 October 2013
Capacity utilisation for the manufacturing sector in 2013 declined by 5.3 percentage points to 39.6% compared to 44.9% last year as the economy takes a knock due to political uncertainty and limited lines of credit, said the Confederation of Zimbabwe Industries (CZI) during the launch of the Manufacturing Sector Survey report 2013.
 
The highest growth in capacity utilisation was in the bakery subsector which improved to 82.5% in 2013 from 40% in the prior year while the pharmaceuticals were the hardest hit with capacity falling to 29% from 58% in 2012.

 
During the launch CZI president Charles Msipa said the economy was in intensive care while guest of honour, Minister of Industry and Commerce Mike Bimha said government is aware of the problems and is inviting business to help in proffering solutions for the economy.
 
According to the survey, the major constraints to industry are working capital constraints, low local demand and competition from imports.
 
Other notable factors working against the growth of the manufacturing sector include obsolete equipment, erratic supply of utilities such as water and electricity, shortage of raw materials and high cost of doing business.
 
The survey also showed that 60% of the respondents did not undertake new capital investment in 2013. Of the few who reinvested into their businesses, 59% said they used retained earnings compared to 54% last year while 41% accessed bank loans compared to 36% in 2012.
 
During the debate session industrialists urged government to work on improving investor confidence and craft business friendly legal framework. Some called for protection from import competition through tariffs without necessarily promoting inefficient entities while others cautioned against depending on import protection citing benefits of international trade.
 
Bimha said government is working on an economic blue print which will see certain clusters of the manufacturing industry being prioritized.

- zfn
Tags: Manufacturing,

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