Maputo, Aug. 6, 2024 (Lusa) - The Purchasing Managers' Index (PMI) for business activity in Mozambique remained in positive territory in July, for the third consecutive month, influenced by "continued growth in the private sector", according to Standard Bank, which conducts the inquiry released on Tuesday.
"Companies managed to generate further increases in sales, contributing to growth in production, employment and procurement activity. Cost pressures remained subdued and, to a large extent, companies kept their own selling prices unchanged," reads the study.
It adds, however, that the "outlook for activity over the coming year was less positive, falling to the lowest level since October 2020".
This index had risen in February (50.7 points), for the first time in five months, then also registering the highest growth since July 2023, but returned to negative territory in March (49.7 points), rising in April (49.9 points). It has been in positive territory since May (50.9 points), but fell in July to 50.6 points, down from 51.0 points in June.
"New orders increased for the sixth consecutive month in July, in a context of strengthening market demand and attracting new customers. However, the rate of expansion slowed to the lowest in three months. Similarly, business activity continued to grow at the start of the second half of the year, with companies reacting to the increase in the volume of new orders by expanding their production," the study points out.
However, it acknowledges that "the rate of growth was moderate" in July, adding that the sector data "indicated that the overall increase in activity was concentrated in the categories of agriculture, the secondary sector and wholesale and retail trade" and that companies "also reacted to the higher volume of new orders by expanding their labour numbers and procurement activity".
"Employment rose for the sixth consecutive month. Although modest, the rate of job creation accelerated to a level unprecedented in just over a year. As with production, the agricultural, secondary and wholesale and retail trade sectors were mainly responsible for the increase in the number of employees," it points out.
Although "business expansion plans and expected growth in new orders boosted confidence regarding the outlook for business activity over the coming year", this sentiment fell in July "to the lowest since October 2020" and "exactly 35% of panellists gave an optimistic outlook".
PMI indicators above 50 points point to an improvement in business conditions compared to the previous month, while indicators below that value show a deterioration.
Quoted in the study released today, Standard Bank Mozambique's chief economist, Fáusio Mussá, commented that the drop in this index from June to July "mainly reflects less robust growth in production and new orders, and a decrease in stock purchases".
"It should be noted that employment increased for the sixth consecutive month, as most sectors continued to hire staff," he added.
The Purchasing Managers' Index (PMI) published monthly by Standard Bank is based on the responses of purchasing managers from a panel of around 400 private sector companies.
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