October 2026

  • Output returns to growth amid sharpest rise in new orders since June 2021
  • Purchasing activity increases at fastest rate in survey history
  • Purchase price inflation hits near four-and-a-half-year high

Mozambique’s private sector regained momentum in October, as new orders rose at the sharpest pace in over five years and lifted business activity back into growth. Firms responded by raising their input purchases at a record rate.

However, stronger demand also added to cost pressures, with purchase prices rising at the quickest pace in nearly four-and-a-half years. Business optimism nonetheless remained historically elevated, despite easing slightly from September’s near nine-year high.

The headline figure derived from the survey is the Purchasing Managers’ IndexTM (PMI®). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

The Mozambique PMI recorded above the 50.0 neutral threshold for the fourth consecutive month in October, signalling a further improvement in private sector operating conditions. Additionally, rising from 50.2 in September to 52.7, the index reached its highest level since April 2022.

Private sector activity at Mozambican companies returned to growth in October, following a decline in September. Firms often linked the modest upturn to increased sales and customer activity, although some noted that limited working capital, material shortages and competitive pressures held back expansion.

New business volumes rose sharply, with the rate of growth the fastest since June 2021. Firms cited new customers, product launches and greater market visibility. For the first time in over two years, all five monitored sectors recorded higher new orders, led by construction.

Despite stronger demand, employment fell for the third time in the past four months, as affordability issues limited hiring. However, the rate of job shedding was only marginal.

With capacity under pressure from higher demand, backlogs of work increased for the first time in four months. The rate of accumulation was slight, but the quickest since June 2025.

Purchasing activity rose at the fastest rate since the survey began in March 2015, driven mostly by demand-led restocking. Stocks of purchases subsequently grew at the sharpest pace since July 2022. Meanwhile, supplier delivery times lengthened modestly for the second month running, amid product shortages and increased demand.

Business confidence in the year-ahead outlook eased marginally from September but remained the second-highest in nearly nine years. Over three-quarters of firms expect output to rise, with plans including new branches, technological investment and efforts to build market share.

Overall input cost inflation picked up to a three-month high in October. Purchase prices rose at the sharpest rate since mid-2022, linked to larger orders and higher fuel, transport and import costs, while wage inflation softened. Selling prices rose at a quicker and solid pace as firms passed on higher costs, though competition limited price rises in some markets.

Comment

Fáusio Mussá, Chief Economist – Mozambique at Standard Bank commented:

“The Standard Bank PMI for Mozambique rose in October to a four and half year high of 52.7 (seasonally adjusted), from 50.2 in September. This mostly reflects new orders rising at the fastest pace in over five years, output growing again after a contraction in the previous month, and purchases accelerating.

“Notably, employment numbers fell for the third time in four months in October, suggesting that the economic recovery remains fragile.

“The PMI continues to signal an improvement in the business outlook, with the future business expectations sub-index remaining among the highest in the entire data series. This could well reflect progress in liquified natural gas (LNG) projects, which should help lift aggregate demand in the next 12 months.

“The PMI also signals that the combination of demand recovery and higher transport and logistics costs is leading to price pressures.

“Notably, PMI data remain consistent with our forecasts of a slow GDP growth recovery, constrained by no fiscal space and limited access to funding by this sovereign, which subdues public sector investment. Further, foreign exchange (FX) supply demand imbalances still characterise the economy, constraining credit growth and investment outside the extractive industry.”