Mozambique: Business confidence index improves, still negative

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Mozambique: Business confidence index improves, still negative

4:38 CAT | 13 Feb 2025

File photo: Lusa

The index that measures business confidence in Mozambique improved in January, but remains in negative territory since the post-election protests, which resulted in hundreds of deaths and a downturn in the economy in the fourth quarter of 2024.

“The Standard Bank Mozambique PMI signalled a further contraction in the private sector economy in January,” reads the document, which records an improvement in business optimism in January, despite remaining in negative territory.

The PMI Purchasing Managers’ Index improved to 47.5 points in January, up from 46.4 in December, the lowest month since August 2020. However, it is still in negative territory as values below 50 indicate pessimism among entrepreneurs and managers regarding the evolution of business activity in the country in which they operate.

“The downturn was less severe compared to the end of last year, whilst expectations for future output improved,” the text adds.

The index shows that “there were also renewed increases in staffing and purchases, helped by a further drop in input prices”.

The commentary on the figures emphasises that, “at 47.5 in January, the headline index pointed to a solid deterioration in business conditions at the start of 2025”.

The first month of 2025 “saw output and new orders decrease for the third month running, albeit to lesser degrees than in Decembe.”, it adds. Some firms indicated that the disruptions to economic activity “had eased”, prompting a return of customers and a reduction in the impact of the post-election violence on companies.

January also saw a slight increase in employment, “ending a two-month period of staff cuts”, as did purchases of means of production, which “grew for the first time in three months”.

The PMI index published monthly by Standard Bank is based on the responses of purchasing managers from a panel of around 400 private sector companies.

Source: Lusa