Maputo, Aug. 5, 2025 (Lusa) - Economic activity in Mozambique recorded its strongest growth in two years in July, with employment also rising for the second consecutive month, according to the PMI index released on Tuesday by Standard Bank.
“Business conditions in Mozambique improved for the first time in three months in July, with activity expanding strongly in response to higher levels of new business,” reads the study, which highlights “that the rate of growth in activity was the sharpest in the last two years”.
“Employment also increased, marking the second consecutive monthly increase, although purchases and inventories of production inputs declined. Selling prices remained unchanged after consecutive increases, as companies sought to keep prices stable in a benign cost environment,” the study, conducted by Standard Bank, also said.
The PMI (Purchasing Managers Index) rose from 50.2 in March to 50.5 in April, remaining above the neutral figure of 50 for the third consecutive month, but fell to 49.6 points in May and 49.1 in June, returning to positive territory in July at 50.7.
PMI indicators above 50 points point to an improvement in business conditions compared to the previous month, while indicators below this figure show a deterioration.
"The index signalled a slight improvement in the health of the private sector economy. Companies in Mozambique reported an increase in sales at the beginning of the third quarter, as demand conditions improved after weak demand in June," the PMI study points out, adding that “the recovery in new business was the strongest since September last year,” with respondents “linking this to larger orders, new customers and better supply conditions.”
The data also show that companies “increased their production during July”, with a “solid and the sharpest growth rate in exactly two years”, with construction “a focal point of the recovery, as respondents highlighted new projects and improved productivity”.
"Production increased in all other sectors except the wholesale and retail trade, where total activity remained stable. The increase in sales led to an increase in employment in the Mozambican private sector in July," the study said, stressing that "increased labour capacity helped companies achieve the biggest reduction in their arrears in almost two years."
Quoted in the study, Standard Bank chief economist Fáusio Mussá said that the July indicator “suggests a recovery in economic activity” at the beginning of the third quarter of 2025, with “monthly increases in most PMI sub-indices, including production, new orders, employment and supplier delivery times”.
“However, there was a decline in purchases and stocks, suggesting that the weak availability of foreign currency may be affecting purchases,” Mussá points out.
He stresses that even though the forecast of a "slow recovery in economic growth, due to the effects of post-election tension, fiscal pressures and foreign currency liquidity pressures" remains unchanged, July PMI data show that "production increased at the strongest pace in two years, across all sectors of activity except wholesale and retail trade," but that "business sentiment remains positive."
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