The PMI index of business activity in Mozambique fell into negative territory in March for the fourth time in five months, signalling “weak economic activity”, according to Standard Bank, which conducts the survey released yesterday.
“This was due to a fall in business inventories and shorter delivery times, which cancelled out expansions in new orders and employment,” the study reads.
This index had risen in February (50.7 points) for the first time in five months, registering the highest growth since July 2023, but returned to negative territory in March (49.7 points).
The study nevertheless points to “stable levels of business activity in March”, after February “saw the first monthly recovery since October 2023”.
“The decline in new business growth meant that companies left their production volumes unchanged, and registered a lower degree of confidence regarding the forecast for next year,” it adds.
However, companies “continued to increase their employment levels and purchasing activity in March”, and the expansions “helped firms to reduce their outstanding work, following an increase in February”.
“Input prices rose for the second month in a row, but the inflation rate remained weak. Selling prices continued to rise at a slight pace,” it added.
PMI indicators above 50.0 points point to an improvement in business conditions compared to the previous month, while indicators below this value show a deterioration.
Quoted in the study released today, Fáusio Mussá, chief economist at Standard Bank Mozambique, commented that “production remained unchanged in March, but companies’ stock levels fell, which points to weak aggregate demand, but also to constraints on the supply side”.
