Mozambique: Business activity downturn accelerates in January – Standard Bank

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Mozambique: Business activity downturn accelerates in January – Standard Bank

3:58 CAT | 04 Feb 2021

in file CoM

Mozambique’s business activity index fell from 49.3 points in December 2020 to 47.5 points in January, signalling “stronger deterioration in the private sector economy during January” , according to a Standard Bank analysis.

“Output and new orders both declined sharply, after having nearly stabilised at the end of 2020. Businesses cut spending on input purchases, leading to a softer rate of cost inflation,” a statement sent by Standard Bank to Lusa reads.

The Purchasing Managers’ Index™ (PMI). measures business activity. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The fall in January constitutes “a solid deterioration in business conditions and the fastest seen in four months”, in addition to being the largest since April 2020, the statement says.

“More positively, employment rose for the third successive month in January, with growth accelerating to the fastest in a year. Outstanding work volumes continued to fall, but only marginally,” the report adds.

Commenting on the results, the chief economist of Standard Bank in Mozambique, Fáusio Mussá, said that “Mozambique is experiencing a rough start to 2021, following a challenging year in 2020”, and the increase in Covid-19 cases at the beginning of the year to “likely crimp sentiment and economic recover”.

“Possible delays in the implementation of the US$20bn Mozambique LNG project led by Total, which had a target of first gas exports in 2024, prompted a downward revision of our medium-term GDP growth forecasts,” the Standard Bank Mozambique chief economist added.

In the last 24 hours, Africa recorded an additional 703 deaths from Covid-19, bringing the total to 93,071, and 14,644 new infections, according to the latest official pandemic data on the continent.

According to the African Union’s Disease Control and Prevention Centrs (Africa CDC), the total number of infected people in the organization’s 55 member states is 3,609,519 and the number of recoveries in the last 24 hours 39,879, bringing to 3,114,033 the total recovered since the beginning of the pandemic.

The Covid-19 pandemic caused at least 2,253,813 deaths resulting from more than 103.8 million cases of infection worldwide, according to a report made by the French agency AFP.

The disease is transmitted by a new coronavirus detected in late December 2019 in Wuhan, a city in central China.