Zambia’s business confidence hits 19 months high

ZAMBIA’S business confidence has hit 19 months high as September manufacturing pulse expands.

The country’s September manufacturing activity rebounded to positive territory as Covid-19 pandemic risks fade and positive sentiment rallied the Kwacha giving factory costs significant reprieve.

This is according to Markit Economics latest Purchasing Managers Index (PMI) headline readings. The Markit Economics report highlights manufacturing and agriculture output increase offsetting a fall in services, construction, wholesale and retail faculties.

Employment rose for the fourth month running as firms responded to higher new orders.

Sentiment rose to a 19 month high as optimism supported by currency appreciation and improved business conditions persist. Purchase prices continue to ebb as selling prices eased ending a 13 month inflationary cycle.

“Zambia’s September posture levitated to positive zone, rising to 50.3 from 49.8 in previous month as business conditions improve since April (50.1). 50 is the benchmark for expansion and contraction,” according to the report.

The period August to September saw a postelection currency rally with a 16.8 percent winning streak of the Kwacha that provided a boost for importers assisting with claw back in eroded opportunity in pandemic era.

The positive PMI readings are the second time in the year factory activity expanded and the third time since February 2019, according to a comment from the Kwacha Arbitrageur Magazine.

“Expansion had eluded Zambia for the longest of times due to a cocktail of hurdles ranging from currency woes to energy bottlenecks and in the recent one year, a Covid-19 pandemic affecting supply chains. “With improving confidence in the economy and a fading pandemic, greater private sector optimism is forecast in the Southern African nation,” the magazine stated.