Mozambique’s business activity index fell from 49.3 points in December 2020 to 47.5 points in January, signalling “stronger deterioration in the private sector economy during January” , according to a Standard Bank analysis.
“Output and new orders both declined sharply, after having nearly stabilised at the end of 2020. Businesses cut spending on input purchases, leading to a softer rate of cost inflation,” a statement sent by Standard Bank to Lusa reads.
The Purchasing Managers’ Index™ (PMI). measures business activity. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The fall in January constitutes “a solid deterioration in business conditions and the fastest seen in four months”, in addition to being the largest since April 2020, the statement says.
“More positively, employment rose for the third successive month in January, with growth accelerating to the fastest in a year. Outstanding work volumes continued to fall, but only marginally,” the report adds.
Commenting on the results, the chief economist of Standard Bank in Mozambique, Fáusio Mussá, said that “Mozambique is experiencing a rough start to 2021, following a challenging year in 2020”, and the increase in Covid-19 cases at the beginning of the year to “likely crimp sentiment and economic recover”.
