Mozambique: Business activity index improves to 49.1 points

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Mozambique: Business activity index improves to 49.1 points

3:05 CAT | 04 Mar 2021

File photo: Macauhub

The index that measures business activity in Mozambique improved to 49.1 points in February, recovering from 47.5 points in January, but remains in negative territory, indicating pessimism about economic developments.

“In February, the basic index stood at 49.1, above the 47.5 registered in January, which indicates a lighter deterioration in the health of the private sector economy,” reads a note sent to Lusa, in which it is pointed out that “the latest figure extends the sequence of declining conditions [ … ] to 12 months”.

The Corporate Purchasing Power Index (PMI) measures business activity, with figures below 50 signifying a deterioration in business conditions.

“The increase in the basic index was influenced by a weaker decrease in the volume of new orders, as the drop in demand reached its weakest point in the current 11 consecutive months of decline,” the text adds.

According to data from the survey, carried out between 11 and 23 February, “while several companies continued to record lower levels of new business due to the impact of the coronavirus, others experienced an increase in demand thanks to the strengthening of confidence in the market”. Business sentiment had therefore “reached its highest point since May 2020, given that the companies have projected, in the near future, an increase in the number of customers and an improvement in economic conditions”.

This optimism, however, is tempered by the current economic conditions’ negative impact on company activity.

“Companies continued to face a number of challenges in the first quarter of 2021, including lower customer demand, a weakening currency and border closures. Inflationary cost pressures have accelerated since January and the lack of price-fixing power means that profits remain under pressure,” with redundancies “for the first time in four months”, the document concludes.

Africa recorded an additional 370 deaths from Covid-19 in the last 24 hours, bringing the total to 104,382 deaths with 8,108 new infections, according to the latest continental pandemic data.

According to the African Union’s Centre for Disease Control and Prevention (Africa CDC), the number of infections has risen to 3,914,044 and the number of recoveries in the organisation’s 55 member states has been higher than that of new cases – 11,736 – in the last 24 hours, leaving a total of 3,496,382.

Southern Africa remains the worst-affected region, with 1,840,951 infections and 56,784 dead. Within the region, South Africa, the country hardest hit by Covid-19 on the continent, has recorded 1,514,815 cases and 50,271 deaths, while Mozambique has seen 668 deaths and 60,395 cases.

The first case of Covid-19 in Africa emerged in Egypt on February 14, 2020, and Nigeria was the first country in sub-Saharan Africa to report cases of infection, on February 28.

According to a report from the French AFP press agency, the Covid-19 pandemic has caused more than 114.3 million cases of infection worldwide, and at least 2,539,505 deaths.

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

Source: Lusa