Covid-19: Business confidence drops to 2016 levels in Mozambique

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Covid-19: Business confidence drops to 2016 levels in Mozambique

4:09 CAT | 08 Oct 2020

in file CoM

The confidence of Mozambican business operators in the economy for the next 12 months has fallen to its lowest level in the last four years, according to the country’s ‘Purchasing Managers’ Index’ (PMI) survey, a barometer for business activity. [Read, download the full Standard Bank Mozambique document HERE]

“While firms increased employment, there was a more subdued outlook for future activity in September,” reads the survey report, which states that “the degree of confidence for the next 12 months fell to the lowest in nearly four years, amid concerns over the long-run impact of the pandemic”.

The headline index rose from 46.1 in August to 46.6 in September, remaining in negative territory, since a value below 50 indicates a deterioration in business conditions compared to the previous month.

In September, the Mozambican private sector economy recorded further sharp declines in activity and demand.

“The overall downturn eased slightly from August, helped by a first increase in employment for six months,” reads the document, which points out that “coronavirus (COVID-19) restrictions had a further impact on business activity and demand at the end of the third quarter, as a number of surveyed firms reported a drop in client numbers”.

Despite the reduction in activity and demand from customers, Mozambican companies have started hiring again. “Companies increased hiring during the month following a five-month period of job losses amid COVID-19 restrictions,” the document concludes.

Source: Lusa