Barely two months after levitating from the doldrums to a 26 month high of 50.1 in April, Zambia’s Purchasing Managers Index – PMI is back deeper in contraction at 49.3 for the month of June as the third wave deepens. This represents 0.4 points lower than May’s 49.7. (50 is the benchmark for expansionary ->50 and contractionary -<50 private sector activity).
Faced with rising cases in the month exacerbated by cold weather and a laxity in adherence to health protocols, Zambia’s positivity cases rose to highs of 28.0% in the period with the healthcare system grappling with bed space, oxygen and other respiratory equipment scarcity. The pandemic situation continues to dent business resilience through disruptions across the sectors affecting private sector momentum.
According to Markit Economics report for June, output decreased in June, reversing the expansion seen in May. The COVID-19 pandemic was the main factor leading to a drop in business activity. On the other hand, some panellists reported an improved demand climate. This manifested in rise in employment (staffing levels) the first rise in 17 months.
Inflation continues to drive selling prices higher and the market has seen an 11 month high climb. The copper producer remains in the labyrinth of a weak currency, spiralling inflation and pandemic effects impacting its business ecosystem. Business confidence remains below average.
The Kwacha Arbitrageur
