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Zambia’s Business Condition Downturn still at bay, Though Upside signs Appear

Business conditions in Zambia still showed signs of a downturn as a decline in new orders softened to a four-month low last month, highlighting a slowdown in sales and a lack of money in circulation.

A weaker fall in new orders was registered in January, with the rate of contraction easing for the third consecutive month to the slowest since last September. The Purchasing Manager’s Index (PMI) in January was at 48.1, up from 47.8 in December, indicating a slight contraction, according to figures by IHS Markit/CIPS and Stanbic Bank released last week. 

“Although higher fuel prices and currency weakness resulted in a sharp monthly increase in input costs, the rate of output price inflation moderated, which may be a sign that threats to a rise in consumer inflation are subsiding especially since USD-ZMW [foreign exchange] remains stable,” said Victor Chileshe, Head of Global Markets at Stanbic Bank Zambia.

Recent decreases in workloads led companies to lower their staffing level; this brought an end to a seven-month period of job creation in January as employment decreased fractionally during the month. The survey results indicate that companies are becoming increasingly risk averse and eager to reduce overheads in the face of weakened customer demand, higher fuel prices and a volatile Kwacha. 

Mpmizmwa Index Stanbic Bank Zam 2019 02 28 15 48 30

The 50-mark separates growth from contraction on a monthly basis


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PURCHASING MANAGER'S INDEX PMI BUSINESS ACTIVITY