Zimbabwe's manufacturing sector expanded employment by 6% in 2025, with firms creating an average of five new jobs each, but industry leaders say growing reliance on casual labour and weak domestic supply chains suggest manufacturers remain cautious about the durability of the country's economic recovery.

The findings, presented during the launch of the Confederation of Zimbabwe Industries 2025 Manufacturing Sector Survey Report, paint a mixed picture of a sector that is showing signs of recovery while still grappling with structural constraints that continue to limit competitiveness.

Presenting the survey findings, CZI Chief Economist Cornelius Dube said the sector is also witnessing an influx of new businesses.

"Twenty percent of operators in Zimbabwe's manufacturing are new entrants (less than five years of operation)."

The emergence of new firms points to renewed investor confidence following improved macroeconomic stability, lower inflation and a more stable exchange rate.

However, analysts say many of these businesses remain small-scale and face challenges accessing affordable capital, reliable infrastructure and domestic raw material supply.

Employment also recorded positive growth.

"The manufacturing sector created five new jobs (on average) per firm and net employment in the sector grew by 6% in 2025," Dube said.

The employment gains come after several years in which manufacturers struggled with high inflation, exchange rate volatility and subdued domestic demand that constrained production and hiring.

However, the survey indicates companies remain reluctant to commit to permanent employment.

"The rise in casual employment suggests manufacturers are waiting to see if Zimbabwe's economic stability will be sustained," Dube said.

The increased use of temporary workers reflects efforts by companies to remain flexible as they assess whether recent macroeconomic stability—including single-digit inflation and a relatively stable Zimbabwe Gold exchange rate, can be maintained over the medium term.

The findings coincide with the Reserve Bank of Zimbabwe's recent decision to reduce its policy interest rate from 35% to 30%, citing sustained low inflation while maintaining that monetary policy remains tight. Businesses have welcomed the reduction but continue to argue that borrowing costs remain too high to support significant industrial expansion.

Perhaps the most significant structural weakness highlighted in the survey is the limited integration of Zimbabwe's manufacturing sector.

"Only 7% of Zimbabwean manufacturers are vertically integrated, with limited long-term finance, restraints and underdeveloped supply chains cited as the cause," Dube said.

Vertical integration, where manufacturers source inputs, process raw materials and produce finished goods within interconnected domestic value chains—is widely regarded as essential for improving industrial competitiveness and reducing import dependence.

The finding reinforces concerns repeatedly raised by CZI that Zimbabwe's manufacturers remain heavily dependent on imported raw materials, resulting in higher production costs and continued foreign currency outflows despite the country's abundant agricultural and mineral resources.

Earlier this week, CZI described the country's import dependence as "structural" and "self-reinforcing," arguing that weak domestic suppliers discourage investment while limited investment further entrenches reliance on imported inputs.

The survey findings also align with recent trade data showing Zimbabwe's value-added exports increased by 34.4% to more than US$200 million during the first four months of 2026, driven by engineering products, processed minerals and manufactured tobacco. Industry experts argue that expanding domestic supply chains will be critical if those gains are to be sustained.

Despite the challenges, the growth in new manufacturing firms and employment suggests the sector is responding positively to improved macroeconomic conditions. The next phase of industrial growth depends less on stabilisation and more on structural reforms that improve access to affordable long-term finance, strengthen local input industries and deepen value addition.