Mozambique's private sector experienced its sharpest contraction in nearly three years as the Purchasing Managers' Index (PMI) declined to 48.4 in November, down from 50.2 in October, signalling a downturn after seven months of growth. The Standard Bank Mozambique PMI report attributed the slump to protests and strikes following the general election, which disrupted supply chains, reduced capacity, and weakened customer demand. Business activity and new orders fell significantly, with the construction sector hit hardest. Employment also declined at the fastest pace since March 2021, while input purchases and inventories dropped sharply. For the first time since January, average input costs fell, driven by reduced supplier charges amid weak demand. Despite subdued inflation pressures, the Banco de Moçambique cut its policy rate by 75 basis points in November, citing stable exchange rates and controlled inflation. However, challenges such as post-election tensions, fiscal pressures, and forex imbalances are expected to constrain private sector growth, with GDP forecasted to slow to 3.3 per cent in 2025. Looking ahead, business optimism fell to a four-year low, with only a third of firms expecting growth in the next 12 months, linked to potential recruitment, sales, and publicity initiatives. Attribution: Standard Bank Mozambique PMI® Subediting: M. S. Salama
