Business feels 2021 was better than 2020

Source: Business feels 2021 was better than 2020 | The Herald

Business feels 2021 was better than 2020

Michael Tome Business Reporter

ZIMBABWE National Chamber of Commerce (ZNCC)’s inaugural state of industry and commerce survey 2021 indicates that businesses feel they fared better in 2021 than in 2020.

This is largely because companies were able to get more operating  hours due to the flexible trading conditions following restrictions imposed by the Government last year to contain the spread of the Covid-19 pandemic.

This also allowed the economy, spurred by a bumper agricultural season, to register growth amid projections by the Treasury that gross domestic product will expand by 7,8 percent this year. 

About five key business confidence indicators, encompassing the situation of the business, sector, country, investment, and profitability over the two years under review, were considered.

The survey also incorporated the Service Delivery Index (SDI),  which showed a positive 20 percent, indicating that the 2021 situation was better than operating conditions in 2020.

SDI considers the availability of key infrastructure and inputs like electricity generation and other critical drivers of production.

Generally, In 2021 the local economy exhibited signs of recovery following the debilitating effects of the Covid 19 pandemic in  2020 with the domestic economy expected to grow by 7,8 percent this year, driven mainly by agriculture, mining, and construction across the country.

In the face of the pandemic industrial capacity, utilisation is projected to reach 61 percent this year from 47 percent last year according to the Confederation of Zimbabwe Industries. 

Presenting the survey findings University of Zimbabwe senior economics lecturer Dr Carren Pindiriri said the margin between those who felt 2021 was better than 2020 was marginal.

“Overall, more businesses considered 2021 a better year than 2020, than those who felt otherwise across all the five business confidence indicators.

“. . . it is however important to note that the low figure of 20 out of 100 shows a slight difference between those who feel 2021 is a better year and those who perceive otherwise is small, save for the profitability aspect where there was a marked difference,” said Dr Pindiriri. However, the feeling is a bit different when it comes to the 2022 expectations, which shows that a larger percentage of the businesses are expecting a somewhat more difficult economic situation.     

The study established that 27, 4 percent of the survey participants (business entities) expect the country’s economic situation to be worse and 24, 7 expect an improved economic environment.

According to the survey, the two main reasons behind the pessimism, as pointed out by respondents, are the fears of other waves of the Covid-19 pandemic and the unpredictable environment as the country heads for 2023 general elections.

The survey says 42, 6 percent and 35, 1 percent, respectively, expect investment and profitability in 2022 to be worse compared to 33, 6 percent, and 34, 2 percent who are optimistic the situation will be better.