Septem­ber pri­vate sec­tor growth de­te­ri­o­rates- PMI...

Zambian Business Times - - FRONT PAGE -

Busi­ness ac­tiv­ity for Septem­ber as mea­sured by pur­chas­ing man­agers in­dex – PMI is still in the woods. Zam­bia printed a (PMI) head­line read­ing of 48.6, a de­te­ri­o­ra­tion from 49.0 on ac­count of in­fla­tion­ary ef­fects of cur­rency volatil­ity that caused higher wage and raw ma­te­rial costs. (Read­ings above 50 sig­nal in­creased pri­vate sec­tor ac­tiv­ity while those below 50 sig­nal as low down in busi­ness pulse).

Septem­ber PMI read­ings was 48.6 from 49.0, a 7-month low on ac­count of higher raw ma­te­rial costs and wage bills

Busi­ness ac­tiv­ity for Septem­ber as mea­sured by pur­chas­ing man­agers in­dex – PMI is still in the woods. Zam­bia printed a (PMI) head­line read­ing of 48.6, a de­te­ri­o­ra­tion from 49.0 on ac­count of in­fla­tion­ary ef­fects of cur­rency volatil­ity that caused higher wage and raw ma­te­rial costs. (Read­ings above 50 sig­nal in­creased pri­vate sec­tor ac­tiv­ity while those below 50 sig­nal as low down in busi­ness pulse).

“Weaker cus­tomer de­mand, higher wage bills and in­creas­ing costs of raw ma­te­ri­als is the nar­ra­tive for the wors­en­ing busi­ness con­di­tions seen in Septem­ber. With the ris­ing costs of in­put, it is rea­son­able to ex­pect that customers will soon be pay­ing more for goods and ser­vices,” Stan­bic Zam­bia Head Global Mar­kets – Vic­tor Chileshe com­mented.

The Busi­ness Times in its pub­li­ca­tion dated 24 Septem­ber, forecast a fur­ther slowdown in pri­vate sec­tor ac­tiv­ity fol­low­ing a weak­en­ing kwacha on ac­count of dol­lar scarcity. The Busi­ness Times pred­i­cated head­line PMI of be­tween 48.4 -48.7 from previous lev­els of 49.0. The kwacha has shaved over 22% in value YTD on ac­count of dol­lar fetish and strong dol­lar en­vi­ron­ment glob­ally in the spate of trade war threats be­tween United States and China. Medium term in­fla­tion is ex­pected to tick higher as cur­rency ef­fects price in.

At 48.6 in Septem­ber, down from 49.0 in Au­gust, the head­line PMI dropped to a seven-month low and sig­nalled a fur­ther de­te­ri­o­ra­tion in busi­ness con­di­tions. Out­put, new or­ders and sup­pli­ers’ de­liv­ery times all con­trib­uted neg­a­tively to the head­line fig­ure, partly off­set by pos­i­tive im­pacts from em­ploy­ment and stocks of pur­chases, Markit car­ried on its web­site on 02 Oc­to­ber.

Septem­ber data pointed to chal­leng­ing busi­ness con­di­tions in Zam­bia’s pri­vate sec­tor econ­omy, with the lat­est read­ing from Stan­bic Bank and IHS Markit point­ing to a fur­ther de­te­ri­o­ra­tion in over­all busi­ness con­di­tions. Busi­ness ac­tiv­ity and new busi­ness both de­clined for the sec­ond month run­ning, and at faster rates. The lat­est sur­vey re­sults also sig­nalled weak­en­ing price pres­sures. Although to­tal in­put costs con­tin­ued to rise, av­er­age pur­chase prices fell slightly and wage costs were broadly flat.

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