Business conditions in the country improved in June, following two consecutive months of contraction, with growth in production and new orders, although the situation remains “fragile,” according to the Standard Bank PMI index.
The monthly study, to which Lusa gained access on Monday, July 6, concluded that the recovery recorded in June “was sustained by modest expansions in production and new orders, marking the first improvements since last March.”
“However, the recovery remained fragile, constrained by persistent challenges, including fuel shortages and mounting price pressures, which led to the sharpest rise in production costs in nearly four years,” the study emphasizes.
In June, the Mozambique PMI stood at the neutral level of 50.0, “marking a slight increase” compared to May, which indicates that “business conditions stabilized after slight deteriorations were recorded in the previous two months.”
Last January, the PMI index reversed the growth seen at the end of 2025, falling to 50 points; in February, it rebounded to 50.2, remained at that level in March, and declined to 49.8 points in April. A slight recovery followed in May, to 49.9, which was repeated in June.
PMI readings above 50 points indicate an improvement in business conditions compared to the previous month, while readings below that level indicate a deterioration.
“The index’s return to equilibrium reflected opposing trends in June, with slight improvements in production and new orders being offset by lower inventories and a slight easing of supply chain constraints. In contrast, new business growth resumed for the first time in three months, with respondents citing the acquisition of new customers, product launches, and inventory replenishment as the main factors,” the report states
Production volumes also increased, in this case “driven by the opening of new branches and strategic operational changes,” although “the pace of growth was negligible.”
“Employment was another metric that improved in June, with companies creating more jobs for the thirteenth consecutive month and at a slightly faster pace. However, the growth rate remained relatively moderate,” it further notes.
Last January, the PMI index reversed the growth seen at the end of 2025, falling to 50 points; in February, it rebounded, rising to 50.2, remained at that level in March, and fell to 49.8 points in April.
As cited in the study, Fáusio Mussá, chief economist at Standard Bank Mozambique, notes regarding the June data that production prices in the country “rose significantly,” reflecting “a combination of the impact of the fuel price increase in May and fuel shortages in May and June, which are constraining production growth.”
He also notes that the June survey “signals an improvement in business sentiment, with the PMI subindex for future business expectations rising to its highest level in the past three years.”
“This result from the monthly survey may well reflect expectations that progress on various liquefied natural gas (LNG) projects will contribute to an increase in aggregate demand over the next 12 months,” Mussá adds.
