The Purchasing Managers Index™ (PMI™) from Standard Bank revealed that business activity in Mozambique fell again last December, for the second month in a row, ending the year in the weakest position since the beginning of 2023.
“Companies ended the year with order book volumes falling into negative territory and levels of activity and purchases continued to decline, leading to the biggest reduction in stocks since July,” said the document released on Thursday, 4 January, by Lusa.
According to the study, Mozambican companies reduced their production levels in December, with the decrease accelerating slightly but remaining modest overall.
“The decrease in activity was largely due to weak sales and the depletion of inventories. Companies noted that customers’ purchasing power had weakened due to rising interest rates, although the rate of decline in new orders was generally only slight,” he said.
Commenting on these results, Standard Bank’s chief economist, Fausio Mussá, noted that “this fall in the index mainly reflects contractions in production, new orders, stocks and the quantity of purchases, which points to moderate aggregate demand”.
“In December, companies faced higher purchase costs, but were unable to increase sales prices by the same magnitude due to weak demand. This situation is consistent with the fact that Gross Domestic Product (GDP) growth remains low due to weak investment and the combined effects of current fiscal pressures and a restrictive monetary policy,” he described.
The PMI index had already fallen in November, for the first time since January, to 49.6, and in December it fell again to 48.8.
“Figures above 50 show an improvement in business conditions, while figures below show a deterioration,” concluded Fausio Mussá.
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.
