Mining slump drags down industrial output

DAR ES SALAAM: INDUSTRIAL production weakened in the second quarter of this year as a slump in mining offset gains in manufacturing and utilities, according to the National Bureau of Statistics (NBS).

The Index of Industrial Production (IIP) fell 1 per cent to 106.4 in the three months through June, down from 107.5 in the first quarter, the bureau said.

The quarterly decline was driven largely by the mining and quarrying sector, which contracted 3.8 per cent, reflecting reduced output in both metal ores and other quarrying activities.

Mining, Tanzania’s largest industrial component with a 28.8 per cent weighting in the index also posted a 5 per cent year-on-year drop, reflecting weaker output across key minerals, softer global commodity conditions and ongoing operational challenges in a sector that has been central to recent investment flows.

Despite the quarterly pullback, industrial activity held up better on an annual basis. The IIP rose 1.4 per cent from a year earlier, supported by sharp increases in utilities.

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Electricity and gas production surged 19.4 per cent, while water supply and waste management jumped 19.5 per cent, signalling continued improvements in infrastructure capacity and demand.

The manufacturing sector, which carries the largest share of the index at 58 per cent, was broadly stable. Output rose 0.2 per cent from the previous quarter but slipped 0.1 per cent from a year earlier, as gains in higher-value segments were offset by declines in traditional industries.

Subsectors posting strong annual growth included electrical equipment (+23.7 per cent), furniture (+22.3 per cent) and beverages (+20.5 per cent). In contrast, textiles (-32.7 per cent), paper products (-21.9 per cent) and rubber and plastics (-19.5 per cent) recorded steep declines, highlighting the sector’s uneven recovery and shifting production structure.

Utilities, despite a minor quarterly dip, have been among the fastest-growing components of the index over the past year. Electricity output dipped 1.0 per cent quarter-on-quarter, while water supply fell 1.1 per cent, partly reflecting seasonal variations.

The data suggest that while the country’s industrial base continues to expand in select areas, weakness in mining and key manufacturing segments remains a drag on overall industrial momentum.