Key insights
- Mozambique's private sector contracted in April, with the PMI falling below 50 due to weaker sales and supply disruptions linked to Middle East conflicts. New orders declined, and vendor performance worsened. While hiring continued, input costs fell slightly, and output prices rose. Overall, this indicates a minor drag on emerging market sentiment, with limited direct impact on US equities but potential indirect effects through broader global economic concerns.
Investing.com -- Mozambique’s private sector business conditions deteriorated in April for the first time in seven months, as companies reduced activity levels due to weaker sales and supply disruptions, according to the Standard Bank Mozambique PMI released Wednesday.
The headline PMI fell to 49.8 in April from 50.2 in March, dropping below the 50.0 threshold that separates expansion from contraction. The reading indicated a slight deterioration in private sector business conditions.
Business activity declined for the first time since June 2025, though the contraction remained marginal. Companies cited lower client spending, material and fuel shortages, and operational disruptions as reasons for the downturn.
New orders also fell as market conditions remained subdued and client demand tapered. The drop in new business was the quickest seen in ten months, though it remained relatively modest.
Fuel shortages caused by the war in the Middle East led to delays in input deliveries, according to survey respondents. Vendor performance worsened for the first time since February 2025.
Companies responded by reducing purchases of raw materials and other components for the second consecutive month, though the pace of decline slowed. Input stocks dropped for the first time in five months.
Mozambican firms continued hiring staff to build capacity, with job numbers rising for the eleventh straight month, albeit at a subdued pace. The hiring activity contributed to increased wage costs across the private sector.
Total expenses were constrained in April due to reduced purchases, with input costs falling for the first time since May 2025. The decrease was fractional, as some companies reported higher fuel prices.
Companies raised output prices for the ninth consecutive month in April. The rate of inflation picked up from March but remained relatively subdued.
Output expectations improved for the second month in a row. Companies predicting output increases over the next 12 months cited higher investment spending, job creation, sales pipelines and hopes for stronger profits.
The survey covered approximately 400 private sector companies across agriculture, mining, manufacturing, construction, wholesale, retail and services sectors. Data were collected April 9-27.
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