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Conrad Mwanawashe Business Reporter
BUSINESS confidence in Zimbabwe is low as economic growth continues to decelerate, the quarterly Confederation of Zimbabwe Industries Business Confidence Survey says. The purpose of the survey is to ascertain, at a given moment, the view of those in charge of manufacturing establishments regarding their situation.

Data for the first quarterly survey was collected between July and September 2015 through self-enumeration, telephone and in-person interviews. The Business Confidence Index and the Purchasing Managers’ Index compiled by the business lobby group show less confidence within the manufacturing sector. The BCI and the PMI measure different aspects of the economy, the first regarding the business climate and the second the prediction of the manufacturing GDP, but both show similar negative situations.

Launching the Quarterly Business Confidence Index, CZI present Mr Busisa Moyo said 322 responded and the findings show that most of the companies are negative about this year.

“There is less confidence in the economy at the country level. For all the indicators of the BCI, there is higher proportion of negative sentiments. The overall BCI shows negative values for both quarter on quarter, as well as year on year sentiment. It is most negative for the country, less for the sector, and least so for the establishment,” said Mr Moyo.

“Among the components, the least negative are profitability and investment, in this order. Generally, the expectation is less negative than the situation for both the quarter on quarter and the year on year,” he said. The BCI ranges between -100 to +100 and figures can fall in between. A general rule is that a negative BCI indicates low confidence. A positive figure is preferred.

Therefore, a figure of -33,9 and -37,2 shows less confidence within the manufacturing sector. It points to a situation which is not good. For the PMI, the overall result is 43,1, which is close to 42 the indicator of a downturn in the economy and this again shows the situation in the manufacturing sector is not good. All the components of the PMI show values lower than 50, with employment and order books being below 40.

By sector, the clothing and textile division shows values near to 50 (unchanged), but the other two are closer to the downturn at 42. The methodological approach of CZI’s Business Confidence Index is based on the Japanese Tankan Sentiment index which has significant dissemination in many countries, for instance, Spanish BCI and the German IFO.

The Purchasing Managers’ Index is based on the methodological approach of Markit Group, which conducts performance management indicators for over 30 countries and the Institute for Supply Management for the US since 1948. Both indices are part of a system of qualitative short-term indicators which are constructed from the data collected by the quarterly CZI Business Confidence Survey.

The tendency survey for manufacturing industries that complement the annual CZI Manufacturing Survey as a monitoring toll was carried out to obtain qualitative information to use in monitoring the current business situation and forecasting short-term development.