According to August readings for Purchasing Managers Index – PMI, Zambia’s factory activity is still in contraction zone at 46 from 44.4 (July). This will be the 11 month the copper producer is headlining readings below 50 consecutively. (50 is the borderline for expansion and contraction).
Driving the weak pulse is lack of liquidity, weak orders and an elevated cost environment despite easing input inflation given effects of currency in the period under review. The Zambian economic landscape has been characterized by weak currency effects as a consequence of dampened sentiment and rising demand for dollars. Energy bottlenecks have not made it an easier for businesses to Operate given the extension in load management hours as communicated by the power utility.
Commenting on the August reading Head of Global Markets – Victor Chileshe said:
“The PMI continues to show further decline in business conditions. With long standing comments such as there is no money in the economy being backed up by the tight liquidity conditions we have seen prevail in the last couple of months on the interbank market.”