Factory activity in Africa’s copper producer, Zambia, is forecast to detente for the month of July given the currency rally last month. Zambia last printed a purchasing managers index of 46.6, improving slightly from 43.9. Business conditions remain tough given lack of money in the system coupled with record input inflation at a 42 month high elevating manufacturing cost curves for most entities.
Zambia has been in contraction zone for 10 months in row which is weighing gross domestic product momentum. The Kwacha bulls observed in July likely eased input inflation and eased manufacturing costs to ease operating conditions for factories. Zambia is projected to print July PMI at 47.2 given the marginal reprieve. However outlook for business conditions looks brighter with the postponement of sales tax implementation to 2020. Sales tax has been a source of uncertainty in the pricing environment of corporations in 2019.
Other Jurisdictions such as Nigeria printed PMI at 54.6, down fractionally from 54.8 in June but still signalling a marked monthly improvement in business conditions across the Nigerian private sector, while Kenya fell slightly from 54.3 in June to 54.1 in July as South Africa deteriorated to 48.4 in July, from 49.7 in June, signalling a third successive month of deterioration in business conditions that was also the sharpest since last November.
Given the public holiday in Zambia, PMI readings are only expected on the 06 August at 10.30.