HARARE, October 7 (The Source) – The Confederation of Zimbabwean Industries (CZI) on Wednesday released results of its Business Confidence Index (BCI) and Purchasing Managers Index (PMI) which showed an economy teetering on the brink of recession.
The PMI measures five factors in business: new orders, inventory levels, production, supplier deliveries, and employment conditions. A PMI over 50 percent means that manufacturing is growing and expanding, while a PMI under 50 percent means that manufacturing is declining.
“The overall PMI quarter on quarter is 43.1, which is close to 42, the indicator of a downturn in the economy. All the components of the PMI show values lower than 50, with employment and order books being below 40,” said CZI President Busisa Moyo presenting the poll results on Wednesday.
Previously, the industrial body would conduct an annual manufacturing sector survey focusing on capacity utilisation, but has this year opted for the BCI and PMI which are regarded to be more precise indicators of economic performance.
Both surveys were conducted between July and September this year.
On a sector basis, the clothing and textile industry showed PMI values near to 50, with the rest of the manufacturing sector closer 42.
The BMI, on the other hand, measures the level of optimism or pessimism that business managers feel about the prospects of their companies and the national economy.
Moyo said quarter on quarter BMI was on -33.9 while on a year on year basis it was at -37.2
The surveys had an 83 percent response rate with 283 questioners being completed.
In neighbouring South Africa, Business confidence is reported to have fallen to its lowest in 22 years, sliding to 81.6 points in September from 84.6 points in August.