Mozambique’s business confidence index rose to 47.5 in January 2025, showing slight improvement yet remaining negative due to ongoing economic challenges. The Standard Bank Mozambique PMI indicated continued contraction in the private sector but noted a less severe downturn compared to late 2024. Some businesses reported easing disruptions and positive shifts in hiring and purchasing activities.
In January, Mozambique’s business confidence index showed slight improvement but continued to reflect negative conditions since the post-election protests, which triggered significant economic decline and violence late in 2024. The Standard Bank Mozambique PMI indicated a contraction in the private sector economy, despite increasing business optimism as firms began to adjust to the situation.
The PMI Purchasing Managers’ Index rose to 47.5 in January from 46.4 in December, marking the lowest figure since August 2020. Values below 50 signify a negative business outlook, indicating ongoing pessimism among entrepreneurs regarding future economic conditions.
January’s report noted that although the downturn persisted, its severity had lessened compared to late 2024, with improving expectations for future performance. Positive signs included renewed hiring and increased purchases stemming from a drop in input prices. However, the index at 47.5 still indicated a notable deterioration in business conditions at the start of 2025.
In this first month of 2025, output and new orders decreased for the third consecutive month, though at reduced rates compared to December. Some firms reported easing disruptions from previous violence, allowing a return of customers and decreasing negative impacts on operations. Additionally, January marked an end to staff cuts, showing a slight employment increase alongside growth in production purchases after a three-month decline.
The PMI, compiled monthly by Standard Bank, incorporates surveys from about 400 private sector purchasing managers, providing insights into the overall economic conditions of Mozambique’s business environment.
In summary, while the business confidence index in Mozambique improved slightly in January 2025, it remains in negative territory. Factors such as reduced severity of economic downturn, slight increases in employment, and a return to customer activity provide a glimmer of hope for businesses amid ongoing challenges. Key metrics indicate that while conditions are tough, there may be opportunities for recovery in the near future.
Original Source: clubofmozambique.com
