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Namibia: Manufacturers Pessimistic About Next Quarter Performance in Namibia

2013/08/14

Namibian manufacturers are not overly optimistic on their outlook, a survey of members of the Namibia Manufacturers Association (NMA) released recently has found.

The survey for the second quarter of this year shows that sentiments part manufacturers are at their very lowest, with the Sentiment Index declining to -14.89 from the 19.24 recorded at the end of the previous quarter. The Present Situation Index as well declined sharply to -35.24 from 2.65 in the previous quarter.

"The Expectations Index was on a downward trend as well showing that manufacturers have a very pessimistic view concerning production and productivity within the sector over the next few months," the survey found.

Local brokerage and research firm Simonis Storm Securities (SSS) conducted the survey. The SSS Manufacturing Index is the average of the numbers for the survey's questions and ranges between -100 to +100. Basically, additional positive responses mean a higher index, while additional negative responses mean a lower one. The survey as well calculates a Present Situation Index, applying the same calculation to the questions about the current business conditions, while an Expectations Index is based on the forward-looking questions.

According to the survey manufacturers who experienced an increase in production volumes declined to 13 %, from 28 % in the previous quarter. Export levels from manufacturers, in terms of their total volume output have declined significantly over the completed quarter.

Capacity utilisation increased slightly to 69 % from 68 % in the previous quarter. Fewer manufacturers expected volumes to increase over the next quarter. Unemployment is set to increase by 25 % with manufacturers expected to decrease their employee capacity. Furthermore, the number of respondents experiencing decreasing manufacturing volumes rose from 16 % to 31 %. Six % of respondents recorded above normal order levels, lower than the 16 % recorded in the previous quarter. A significant number of respondents, 31 %, indicated that orders have decreased which has sent a worrying signal for next expectations.

A total 17 % of manufacturers reported above normal export orders, which is slightly higher than 11 % in the initial quarter. The number of respondents reporting a decrease in order levels rose to 33 % from 17 % in the initial quarter. Most manufacturers reported normal stock levels at 75 % of finished goods in the second quarter of 2013. There has been an increase in those that reported above normal levels of stock of 13 % in the second quarter of the year from 8 % in the previous quarter. Moreover, manufacturers' views of their current business situation remain virtually the same as that of the last quarter with only a % point increase in the participants who felt that the present business situation has worsened.

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