According to Standard Bank, which conducted the survey, the PMI index of business activity in Mozambique remained positive in September for the fifth c successive month, influenced by the anticipation of new orders in light of Wednesday’s elections.
“Private sector business conditions across Mozambique improved for the fifth successive month in September, ,” according to the study, released on Monday, “as firms continued to receive greater intakes of new business.”
“However, a much slower uplift in business activity weighed on performance, leading to weaker job creation and a slight drop in input purchases.” it also acknowledged.
This index rose in February (50.7 points) for the first time in five months, also registering the highest growth since July 2023, but returned to negative territory in March (49.7 points), rising in April (49.9 points). It has been in positive territory since May (50.9 points) but fell in September to 50.3 points, down from 50.9 points in August, albeit “at its lowest point in this period,” it said.
According to the September PMI, performance in this period was underpinned by “a moderate rise in new order volumes during September” and Mozambican firms “reported that the introduction of new services, expanded capacities and new clients wins had driven sales”.
“In addition, some panellists noted that the general election next month encouraged clients to bring forward new orders. Although higher levels of incoming new work prompted a further expansion in business activity in September, the rate of growth softened markedly from the previous month and was only minimal” it read.
Even so, slower demand growth, limited financial resources and reduced imports weighed on private sector activity”, but growth also “eased” in the secondary sector, wholesale and retail trade and the services sector, “while reductions in output were observed across agriculture and construction”.
“With activity growth slowing, Mozambican firms registered a slight decline in their purchasing activity, the first since April. Job creation slowed, with the survey data signalling the softest increase in employment for five months. Reduced purchases and softer headcount growth coincided with a fresh uptick in backlogs, which was marginal but the secondfastest in over two years,” the survey explained.
The document emphasised as a “positive note” that the “drop in purchases” by companies “contributed to a slower increase in business expenses”, but “output expectations among Mozambican firms softened” in September, being “among t the weakest recorded
since early 2023”.
“Firms broadly expect activity to increase, with comments signalling investment, innovation and greater market share as some of the drivers of positive forecasts.,” the report concludes.
PMI indicators above 50 points show an improvement in business conditions compared to the previous month, while indicators below this value show a deterioration.
Quoted in the study, the chief economist at Standard Bank Mozambique, Fáusio Mussá, commented that September PMI data “shows softer growth in output, new orders, employment, supplier delivery times and stocks of purchases”.
“Business sentiment, as measured by the future business expectations sub-index, declined – and remains volatile, with survey respondents expecting softer growth in output over the next 12-m,” he recognised.
The Purchasing Managers Index (PMI) published monthly by Standard Bank is based on the responses of purchasing managers from a panel of around 400 private sector companies.
