Africa-Press – Mozambique. The Mozambique PMI® signalled the best improvement in private sector conditions for ten months in December, driven by the strongest increase in workforce numbers in over two-and-a-half years. Rising levels of new business and output supported firms in their decisions to hire, purchase more inputs and, for the first time since last April, increase their stocks. However, the rate of input cost inflation remained at one of its highest levels in 2025.
The headline figure derived from the survey is the Purchasing Managers’ IndexTM (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The PMI ticked up slightly from 50.8 in November to 50.9 in December, indicative of an improvement in the health of the sector for the third month in succession. Although the overall upturn was marginal, it was also the greatest recorded since last February, as stronger workforce growth, renewed stockpiling and a softer easing of supply chain pressures counteracted a slower uplift in sales.
Notably, the rate of increase in employment across the private sector economy was the fastest recorded since April 2023. Efforts to boost workforces were observed across all major sectors, with firms often highlighting increased staff requirements due to an improvement in customer demand.
New order volumes rose for the third successive month in December, and the upturn was stronger than the series trend, despite losing pace from November’s 17-month high. Companies signalled that the receipt of new work enabled an increase in output, which has now risen in each of the past six months. The overall uplift in business activity was moderate, with the most pronounced rises seen among service providers and wholesale & retail companies.
Improving economic conditions allowed Mozambican firms to be more liberal with their inventory strategies in December, securing higher stocks for the first time in eight months. This coincided with a solid increase in purchasing activity that was the most marked since last April. Businesses often looked to purchase inputs in order to facilitate higher sales. Once again, suppliers reacted positively to business purchases, as they reduced lead times sharply and often delivered items ahead of schedule, according to survey comments.
Meanwhile, Mozambican companies saw another increase in their input costs during December. Stronger demand and reports of material price increases meant that total purchasing costs rose to the greatest extent in 16 months, while wage expenses grew at the fastest rate in two-and-a-half years. Although some firms lifted their selling charges as a response to these input cost pressures, the overall increase in charges was only mild.
When looking towards 2026, Mozambican businesses showed robust optimism. The 12-month outlook was the strongest since last September and better than the average seen in 2025. Firms reported that forecasts of increased sales, capacity gains from staff additions, new products and efficiency improvements would all help to improve output over the next 12 months.
Comment
Fáusio Mussá, Chief Economist – Mozambique at Standard Bank commented:
“The Standard Bank Mozambique PMI rose to 50.9 (seasonally adjusted) in December, from 50.8 in November, closing the fourth quarter of 2025 in positive territory.
“In December, most PMI sub-indices came at the level of 50 or above, denoting that the private sector economic activity continues to recover. PMI outcomes above the 50pt benchmark mean month-on-month growth in economic activity.
“Even though input costs rose at one of its highest levels in 2025, we see limited passthrough from cost increases to higher sales prices. Therefore, even considering festive season price pressures, we estimate inflation to have eased further in December, to 4.1% y/y, supported by favourable base effects, from 4.4% y/y in November.
“We retain our 2026 year end inflation forecast at 5.6% y/y, supported by prospects of the USD/MZN pair remaining stable.
“Looking ahead, the PMI suggests some recovery in the business outlook, with the PMI future business expectations sub-index up for the month, after declining in the previous two months. Most likely respondents’ factor in prospects of liquified natural gas (LNG) projects progress supporting growth.
“For 2026, we forecast GDP growth at 1.1% y/y, denoting a slow recovery from our estimates of a 0.7% growth in 2025. Mozal likely shutting down at the end of the first quarter of 2026 adds pressure to an economy that remains affected by fiscal and foreign exchange (FX) liquidity pressure.”
