Mozambique: Business activity edges lower, PMI shows

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Mozambique: Business activity edges lower, PMI shows

3:20 CAT | 03 Oct 2025

File photo: Standard Bank Mozambique

Mozambican business activity deteriorated again in September, with companies recording their first decline in sales in three months, according to the Standard Bank Purchasing Managers’ Index (PMI) for Mozambique released today.

“Subsequently, output growth was limited, while companies reduced their inventories of production inputs for the fifth consecutive month. On a positive note, hiring continued to increase and cost pressures remained moderate, partly due to an improvement in the supply environment,” the survey states, noting that “for the first time in three months, Mozambican firms reported a decline in new orders intake,” although the drop was slight.

Quoting in the survey, Standard Bank’s chief economist, Fáusio Mussá, describes September as “another month of weak performance for the private sector economy.” He observes that the Mozambican economy recorded year-on-year contractions in GDP between the final quarter of 2024 and the second quarter of 2025, “which indicates a slow recovery from the impact of post-election disruptions.”

“We would not be surprised if GDP data for Q3 2025 show that the economy remains in recession. Our forecasts indicate the economy will emerge from recession starting in Q4 2025, supported primarily by favourable base effects,” Mussá adds.

The PMI survey notes that “several companies surveyed commented on the lack of customer orders and cash‑flow difficulties,” while “others reported increased demand levels,” and that “underlying data by sector indicated that the services and wholesale and retail sectors contributed to the decline in sales.”

It further points out that production “increased in September, but at a slight pace — the slowest in three months” and that increase “occurred in the context of a rise in employment for the fourth consecutive month.”

“With capacity utilisation rising, companies were once again able to reduce unfinished work,” the report acknowledges.

The Standard Bank Mozambique PMI edged down to 49.4 in September 2025 from 49.9 in August, signalling another month of weak performance in the private sector economy. The index had previously risen from 49.1 in June to 50.7 in July (entering expansionary territory), before dipping back to 49.9 in August and falling further in September.

(More broadly, values above 50 indicate improving business conditions compared to the previous month; values below 50 indicate deterioration.)

Although business conditions eased in September, the report notes that “companies remained confident that activity will rise over the next 12 months, with optimism levels broadly in line with those seen since early 2025.”

“Panel members frequently reported that positive expectations were driven by hopes for more new work, increased hiring, product development, and greater working capital,” it concludes.

Source: Lusa