Data from the Purchasing Managers’ Index™ (PMI) compiled by Standard Bank indicate that output among Mozambican companies declined in April, slipping into negative territory amid weaker demand and fuel supply shortages.
“Mozambique recorded a deterioration in business conditions for the first time in seven months, driven by falling sales, fuel shortages and other supply constraints, which led domestic firms to scale back activity levels,” the study, cited by Lusa, states.
According to the report, “the contraction in output contributed to a second consecutive monthly decline in input purchases, which in turn provided some relief in cost pressures. However, wage pressures intensified as hiring efforts continued.”
The report also highlights that output contracted in April for the first time since June 2025. Customer demand softened, leading to a reduction in new orders, while delivery times lengthened due to fuel shortages.
The PMI had risen from 49.1 in June 2025 to expansion territory in July, reaching 50.7, but fell back into contraction in August (49.9) and September (49.4). It recovered to 50.4 in October, 50.8 in November and 50.9 in December. However, growth stalled in January at 50.0, edged up to 50.2 in February, remained unchanged in March, and declined to 49.8 in April. PMI readings above 50 signal an improvement in business conditions compared to the previous month, while values below 50 indicate deterioration.
Panel respondents attributed April’s slowdown to reduced consumer purchasing power, shortages of materials and fuel, and operational disruptions. Companies also reported a decline in new orders, reflecting fragile market conditions and weaker demand.
“Although relatively modest, the drop in new orders was the sharpest in the past ten months. According to several panel members, fuel shortages linked to the war in the Middle East caused delays in the delivery of inputs. As a result, supplier performance deteriorated for the first time since February 2025, albeit slightly,” the report notes.
Quoted in the report, Standard Bank Mozambique’s Chief Economist, Fáusio Mussá, said that despite the negative impacts linked to the situation in the Middle East and domestic fuel supply disruptions, April’s PMI “signals an improvement in business sentiment.” However, he warned that the current negative fuel supply shock increases Mozambique’s economic risk, at a time when GDP growth could fall below the bank’s forecast of 1.1% for 2026.
“We expect a GDP contraction in the second quarter of 2026, considering the impact of the Mozal shutdown in mid-March, after the company failed to renew its electricity supply contract. In 2025, Mozal accounted for 15% of exports of goods and services, 2% of foreign currency supply and more than 3% of GDP,” the economist concluded.
Source: Diário Económico
