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Renewed expansions in output and new orders have boosted the Zambian private sector return to growth midway through the second quarter of the year.
A key factor behind the renewed growth of the sector in May was an easing of inflationary pressures, according to the monthly Purchasing Managers’ Index (PMI) survey conducted by Stanbic Bank.
According to the survey released on Monday, helping companies in May was an easing of inflationary pressures, with input costs rising at the softest pace in 2023 so far.
“Overall input cost inflation slowed for the second month running to the weakest in the year-to-date. In turn, output prices increased modestly, and to the least extent in four months,” the survey.
The index signalled a first improvement in business conditions in three months.
Read more: Out put, new orders down amid cash squeeze —Stanbic PMI report
Although modest, the strengthening of the health of the private sector was the largest seen since December 2021.
New orders increased at the fastest pace in almost a year-and-a-half, while growth of activity was the most pronounced since November 2017.
Output increased across each of the five broad sectors covered by the survey.
Musenge Komeki, Head of Trading at the Bank commented: “Renewed expansions in both output and new orders helped to support the overall improvement in business conditions over the previous month.
“Additionally, a key factor was the easing of inflationary pressures which altogether led to the index signalling a first improvement in business conditions in three months.”
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