Business activity in Mozambique expanded at the quickest pace in nine months in November, driven by a sharp increase in new business and higher employment, Standard Bank data showed on Wednesday.
The Purchasing Managers’ Index (PMI) rose to 50.8, up from 50.4 in October, marking the strongest improvement in business conditions since February 2025. Readings above 50 indicate growth, while below 50 signal contraction.
The latest PMI survey highlighted a broad-based upturn across the economy, with all five monitored sub-sectors reporting higher new orders.
Firms attributed the increase to stronger customer demand and successful product launches. Output also expanded during the month, with the pace of growth the fastest since July, supported by the uptick in orders.
New orders and employment drive growth
New business grew for the second consecutive month, accelerating at the fastest rate in nearly a year-and-a-half.
To cope with rising workloads, companies increased staffing at the strongest pace since July 2024, reflecting both additional capacity requirements and the filling of vacancies.
Higher employment allowed firms to reduce outstanding work, with backlogs declining for the seventh consecutive month.
Inventories were reduced for the seventh straight month, suggesting companies remain cautious about stock levels despite rising demand. Meanwhile, purchasing activity increased at a solid rate, and suppliers’ delivery times improved, reflecting competitive pressures and stronger supply chain performance.
Price risks persist
The survey also pointed to rising cost pressures.
Overall input prices increased at the fastest pace in nine months, driven by higher material costs and wage growth. These cost pressures contributed to a modest rise in average selling prices, although inflation remained mild compared with the survey’s long-term trend.
Encouragingly, Standard Bank expects foreign exchange stability will continue to cushion inflationary pressures.
“The PMI suggests some passthrough from cost increases to higher sales prices,” said Fáusio Mussá, Chief Economist at Standard Bank Mozambique. “For now, USD/MZN stability will likely continue to limit inflationary pressures.”
Outlook softens amid rising uncertainty
Despite the uptick in overall PMI, business optimism fell for the third straight month to the lowest level in 2025.
However, firms remained generally positive about the year ahead, citing positive sales projections, rising consumer orders and quality improvement initiatives.
The softer outlook comes as Mozambique continues to reel from post-election shocks, which have pushed the economy into negative growth for three consecutive quarters in 2025.
Analysts warn that a potential shutdown of the country’s largest industrial employer, Mozal Aluminum, could intensify fiscal and currency pressures in the short term, weighing on private sector activity.
At the same, prospects for liquefied natural gas (LNG) projects offer hope of a recovery.
“We expect GDP growth to turn positive in the final quarter of 2025, supported by favourable base effects, but there is a high risk of contraction from the second quarter of 2026 if Mozal is forced to shut down,” Mussá said.
