Mozambique: Business index falls to its lowest level since April 2019

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Mozambique: Business index falls to its lowest level since April 2019

2:23 CAT | 08 Apr 2020

File photo: Lusa

The index of business activity in Mozambique fell in March – for the first time in five months – to 49.9 points, its lowest value in the last eleven months.

“The headline Purchasing Managers’ Index (PMI) fell to 49.9 in March, ticking just below the 50.0 no-change mark and signalling a fractional decline in business conditions at Mozambican firms,” this month’s report reads . “The reading was the lowest observed since April 2019 and compared with 51.6 posted in February.”
The most recent data, the communique notes, “showed a contraction in business activity in March,” which it explains by “a weaker rise in new work, leading to softer increases in both employment and purchases”.

The index, calculated before the isolation measures enacted on April 1 in Mozambique, reveals however that “expectations for future output remained strong, as input cost inflation eases”.

The main value calculated by the survey is the Purchasing Managers’ Index, where readings above 50.0 signal an improvement in business conditions on the previous month, and reading below indicate a deterioration.

According to Standard Bank, “the rate of expansion weakened due to a number of firms seeing a lack of new clients, which was sometimes associated with the coronavirus disease (Covid-19) outbreak”.