Online Reporter
Tapiwanashe Mangwiro
Senior Business Reporter
Zimbabwe’s services industry found it easy to access bank credit, while employment levels were steady in the second quarter of this year, despite demand and order books remaining subdued, according to the latest official data.
The Services Business Tendency Survey conducted by the Zimbabwe National Statistics Agency revealed that 27,1 percent of businesses found access to bank credit easy during the quarter, compared with 14,2 percent who said it was difficult.
This translated into a positive net balance of 12,9 percentage points, suggesting a modest easing of financial constraints across most sectors.
“Access to credit improved during the second quarter, particularly for construction and financial services companies,” said Mr Mukoki Kureva, ZimStat manager for services statistics, during the release of the report.
“This points to greater confidence by financial institutions in the viability of service-sector operations.”
The report noted that 45,8 percent of respondents in the construction industry and 39,4 percent in financial and insurance activities viewed bank lending conditions as easy, the highest among surveyed sectors.
In contrast, just 3,2 percent of wholesale and retail operators reported similar access, underlining continued strain among small-scale traders and shop owners.
Mr Kureva said the data reflected the uneven distribution of credit flows, with financial institutions showing a clear preference for larger, capital-intensive projects.
“While credit availability is improving, the perception of risk in trade and hospitality remains high,” he said.
Despite easier borrowing conditions, the volume of demand across the services industry showed little momentum. In accommodation and food services, one of the largest urban employers, 45,7 percent of respondents, demand was unchanged from the first quarter, while 34,3 percent of operators reported a decline.
Transportation and storage companies were slightly more upbeat, with 30,3 percent reporting higher demand and a positive net balance of 25 percentage points, the strongest reading among the five sectors surveyed.
“In general, demand patterns are stabilising but not yet showing significant growth,” Mr Kureva explained. “Businesses are still cautious, and household spending power remains under pressure due to price adjustments and liquidity constraints.”
On inventory levels, 61,2 percent of firms in the wholesale and retail trade sector described their current stock levels as adequate for the period, while 6,5 percent said they were above normal.
This suggests that retailers are managing inventory more efficiently, possibly in response to fluctuating consumer demand and currency volatility.
However, the construction sector painted a different picture.
Half of the surveyed companies said their total order books were below normal, while 8,3 percent reported them as above normal, resulting in a negative net balance of 41,7 percentage points.
“Construction continues to face a challenge of under-utilised capacity,” Mr Kureva said. “Even with better access to credit, the pipeline of new contracts remains weak. This could have spillover effects on employment and supplier industries.”
Despite subdued demand, employment across the services sector remained relatively stable during the period. More than 60 percent of respondents reported no change in the number of people employed in their establishments, while around 15 percent indicated an increase.
The financial and insurance sector recorded the most resilience, with 65 percent of firms maintaining stable employment levels and 25 percent hiring more workers.
The construction sector, by contrast, remained more conservative, with a small decline in workforce levels.
“Employers are taking a wait-and-see approach,” Mr Kureva noted. “While there is little evidence of widespread job losses, businesses are not yet confident enough to expand their headcount meaningfully.”
The survey found that average selling prices were largely stable during the quarter, with 78 percent of respondents in wholesale and retail trade reporting no change.
Only 6,5 percent of firms raised prices, reflecting restrained pricing power amid moderate demand.
Competition remained intense, particularly in retail and motor-repair businesses, where 24,7 percent of respondents observed higher competitive pressure compared with the previous quarter.
Business confidence indices varied across sectors.
The financial and insurance confidence index dropped to 20 points from 24,4 in the previous quarter, while the confidence index in the construction and wholesale trade remained negative at –22,9 and –6,8 points, respectively.
In contrast, the accommodation and food services confidence index improved to 15,2 from 6,5, and transportation and storage turned positive at 2 from –10,8 in the first quarter.
“The mixed confidence picture tells us that recovery is uneven,” Mr Kureva said. “Financial services remain solid, but consumer-facing sectors are still rebuilding momentum after a difficult start to the year.”
Looking into the third quarter of 2025, respondents expressed moderate optimism, with more than 50 percent of accommodation and food firms and half of financial and insurance operators expecting demand to rise, while 39 percent of transport and storage companies anticipate the same.
The majority of firms (56,9 percent) expect employment levels to remain unchanged, and roughly one in five foresee an increase. Wholesale and retail traders project a slight rise in orders placed with suppliers, with a positive net balance of 12.9 percentage points.
Mr Kureva said that although businesses remained cautious, the outlook is broadly stable, with signs of gradual improvement in credit conditions and demand. He added that the easing of inflation and improved energy availability could support a stronger recovery in subsequent quarters.
“The second quarter was marked by adjustment and consolidation,” he concluded. “If these trends hold, the services sector could emerge as a key pillar of growth in the second half of the year.”
