Mozambique: PMI business activity index falls again

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Mozambique: PMI business activity index falls again

3:17 CAT | 11 Sep 2020

File photo: Lusa

Standard Bank’s Mozambique Purchasing Managers’ Index (PMI) fell from 46.2 in July to 46.1 in August, “signalling a sixth successive monthly deterioration in business conditions at Mozambican private sector firms,” the index’s authors announce.

According to a Standard Bank note seen by Lusa, Mozambican companies “reported a further solid deterioration in the health of the private sector economy in August, as output and new business continued to fall sharply”.

However, “employment fell more slowly, while delivery times moved closer to stabilisation”.

Standard Bank notes that “it was also the first time in four months where the headline reading decreased month on month”.

“While many firms were hopeful of an uplift in activity amid new branch openings, some voiced concerns about the longevity of the Covid-19 pandemic,” the communique reveals.

The impact of the pandemic on demand “led firms to reduce inventories further, with the rate of contraction accelerating for the first time since stocks began decreasing in April”.

The Standard Bank PMI is based on the responses of purchasing directors from about 400 Mozambique private sector companies.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.