Economic activity in Namibia took a hit in the second quarter of 2024, as business registrations fell sharply by 34% compared to the same period last year, official data shows.
According to recent data from the Bank of Namibia (BoN), the decrease was reflected in both close corporations and private companies, which declined by 37.7% and 8.4%, year-on-year, respectively.
Similarly, on a quarterly basis, the total number of registrations of new businesses decreased by 14.3%. The seasonally adjusted series, however, increased by 10.2%.
“The registration of businesses, which serves as a leading indicator for future economic activity, decreased year-on-year during the second quarter of 2024,” the central bank’s quarterly bulletin read.
BoN reported that the manufacturing sector showed resilience, with employment rising year-on-year by 1.6% during the second quarter.
This uptick highlights the sector’s recovery from previous downturns and indicates a gradual strengthening in industrial activity. On a quarterly basis, manufacturing employment also increased, albeit marginally by 0.2%.
However, in contrast to the employment gains, both the nominal wage bill and average wages in the manufacturing sector fell by 2.4% and 2.5%, respectively, quarter-on-quarter.
Despite the declines, the sector recorded a year-on-year increase of 4.3% in the nominal wage bill and 2.7% in average wages, meanwhile, unit labour costs decreased by 0.7% year-on-year, driven by higher productivity per worker.
This reduction in labour costs could enhance the sector’s competitiveness, particularly in the export market.
“Unit labour costs for the manufacturing sector decreased, year-on-year, during the second quarter of 2024,” the report read.
On the other hand, employment in the wholesale and retail sector continued its downward trend, declining by 0.6% year-on-year during the second quarter.
The contraction in employment was particularly notable in the supermarket and furniture sub-sectors. quarter-on-quarter, the sector saw a further decline of 1.5% in employment.
The report stated that despite the fall in employment, the nominal wage bill in the wholesale and retail trade sector increased slightly by 0.9% year-on-year.
However, average wages in the sector fell by 1.0% over the same period, suggesting that wage growth is lagging behind inflationary pressures.
Quarter-on-quarter, both the nominal wage bill and average wages rose by 1.6% and 4.6%, respectively.
