The index measuring business activity (PMI) in Mozambique fell to 37.1 points, “an unprecedented drop” that shows “a sharp fall in production” in April due to the Covid-19 pandemic and restrictions on movement.
“Mozambican firms observed a steep decline in output during April, latest survey data showed, as the escalation of the coronavirus disease 2019 (COVID-19) pandemic led to a severe reduction in new business,” an analysis of Mozambican economic activity in April said.
In the text accompanying the release of the PMI Index, which measures business activity, it is added that “measures to ease the virus spread, including travel restrictions and bans on gatherings, had a massive impact on demand, as job numbers and purchasing activity contracted in light of a worsening outlook for activity”.
According to the data, “the headline PMI fell to a record low of 37.1 in April to indicate a sharp deterioration in the health of the private sector in Mozambique,” compared with a reading of 49.9 in March, just a tenth of a point below the threshold above which business conditions are considered positive.
“Three of the headline index’s sub-components also fell to record lows in April: output, new orders and stock of purchases. The former signalled a severe reduction in activity, with firms linking this to COVID-19 and government restrictions on movement. Businesses were also hit by a sharp fall in new work, reportedly due to weaker customer demand during the pandemic,” the report released by Standard Bank’s economic research office said.
Read the full report HERE
Source: Lusa via Club of Mozambique