Zim sees business confidence rise: Optimism index leaps to 5.8 level President Emmerson Mnangagwa
President Emmerson Mnangagwa

President Emmerson Mnangagwa

Prince Sunduzani, Business Reporter
ZIMBABWE has recently recorded improved business confidence, demonstrating the business community’s confidence in the new political dispensation.

According to the latest Business Confidence Index (BCI) report released by the Confederation of Zimbabwe Industries (CZI), business confidence index rose from a low of -29. 6 in the previous quarter to 5.8 in the fourth quarter of 2017, which shows optimism in the current economic environment.

This comes at a time President Emmerson Mnangagwa has taken over the reins as the country’s leader and inspired confidence in key economic players through his transformative economic policies.

The BCI measures the level of optimism or pessimism that business managers feel about the prospects of their companies or organisations. Business confidence is indicative of the appetite for business decisions that relate to increasing economic activity in the business sector and a positive index means that businesspeople will make long term investments.

“Various events and changes have occurred in the recent past; these include the coming in of the new dispensation, the inauguration speech by His Excellency the President, the presentation of the National Budget, and the Monetary Policy Statement. We have seen business confidence improving,” read the report.

“The composite Business Confidence Index for the fourth quarter of 2017 stood at 5.8 for quarter-on-quarter and 22.9 for year-on-year. This indicates improved confidence and optimism of business leaders regarding the economy. This is the first positive result we have found since the inception of the Index. For your recollection, the Business Confidence for 3rd quarter 2017 was -29.6 for quarter-on-quarter and -9.9 for year-on-year.”

The Expectation Diffusion Index (EDI) was 21 for quarter-on-quarter and 56.9 year-on-year, an improvement from the previous quarter, which was -21.4 for quarter-on quarter and 34.4 year-on-year.

According to CZI, this shows that business is optimistic about first quarter 2018 and fourth quarter 2017 and expects fourth quarter 2018 to be much better compared to first quarter 2018.

The Purchasers Managers Index (PMI) has also improved and now stands above 50, signalling the best results ever recorded by the industrial body under this survey, which was launched in 2015.

The PMI assesses volume of production, order books, speed of supplier deliveries, employment and stock levels. However, despite a positive PMI, stock levels and speed of supply declined due to a shortage of foreign currency and Zimra system failure, which affected the purchase and importation of goods.

“The Purchasing Managers Index (PMI) scale ranges from 0 to 100 and our findings reveal that the PMI is above 50, a signal that the situation has improved. Stock levels and speed of supplier deliveries have declined,” said CZI.

The industry body further urged Government to implement policies and strategies it announced in order to maintain confidence in the economy. — @PrinceNkosy102

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