Zambia’s private sector activity is still in the woods having headlined 48.7 from 48.3 in October. November data reflected power woes that are compounding the copper producers energy bottlenecks.
New orders declined marginally as output remained suppressed offset by an uptick in employment for third month running. Zambian private sector contraction pace decelerated for the fourth month signaling a bottoming in weakness.
Zambias energy crisis is deepening with Kariba dam levels at 11% compared with 57% a year ago, which has compounded the power generation quagmire with parts of country experiencing blackouts of over 15 hours. This has elevated the operating cost environment of business houses that rely on generators and expensive diesel for backup power. This coupled with currency depreciation is transmission higher margins to selling prices as input costs widen.
November reading of 48.7 is the ninth contraction Zambia has experienced back to back. Zambias weak factory activity aligns with the revised growth pace of between 1.5-1.9% for 2019 given actualizing risks to growth.
The Kwacha Arbitrageur
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