Mozambique: Business conditions stagnate in January, PMI shows

The Mozambique PMI® signalled a stalling of business conditions in the private sector at the start of 2026, as order book growth slowed, causing total activity to rise only slightly. Delivery times continued to shorten, indicating a lack of pressure on supply chains. Firms also showed less confidence about the outlook, contributing to a softer pace of job creation.

The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. After improvements in business conditions were seen throughout the final quarter of 2025, January saw the PMI drop to the neutral value of 50.0, down from 50.9 in December.

This was partly due to a sustained reduction in suppliers’ delivery times, which broadly indicates relaxed supply chains. The PMI was also driven lower by softer upturns in output, new business and staffing. Output levels grew for the seventh consecutive month, but the pace of expansion was fractional and the weakest in this sequence.

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While several companies noted the receipt of client requests, weaker sales growth at other companies and some reports of currency shortages underpinned the slowdown. Firms signalled only a marginal increase in new order volumes in January, the softest observed in four months. Nevertheless, the rise was strong enough to spur an expansion in purchasing activity, which is on its longest phase of growth since mid-2022.

One impact of the increase in purchases was on price pressures. In January, Mozambican firms commonly noted that their expenses had risen due to a demand-driven uptick in supplier prices. Notably, overall purchase costs rose at the joint-fastest pace in nearly three years.

Firms were also affected by higher staff costs, although the latest increase was only modest. Positively, Mozambican firms continued to receive inputs in a timely manner. Vendor performance was markedly better, with the rate of improvement ticking up to a 23-month record.

This enabled some firms to shore up their inventories. For an eighth month in a row, companies scaled up their workforce numbers, although the pace of growth did soften slightly from December’s 32-month high. Meanwhile, output prices set by private sector companies increased over the course of January.

The uplift was the strongest recorded since September 2022, but modest overall. Where a rise was recorded, firms mentioned that this was largely due to increasing cost burdens. The construction sector was an exception, with firms in this segment noting reductions in both input costs and prices charged to customers.

Regarding future activity, roughly a third of surveyed businesses projected growth over the 12-month horizon in January. These positive expectations were often due to planned business growth, higher demand and staff recruitment. However, the degree of sentiment softened from December and was at its lowest level since November 2024. Fáusio Mussá, Chief Economist – Mozambique at Standard Bank, commented: “The Standard Bank Mozambique PMI fell to the neutral level of 50 (seasonally adjusted) in January, from 50.9 in December.

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