FX.co ★ Zambia Private Sector Returns to Contraction

The Stanbic Bank Zambia Purchasing Managers' Index (PMI) fell to 49.3 in March 2025, down from 50.9 in February, indicating a return to contraction after a three-month period of growth. This decline was attributed to decreases in both output and new orders, as companies reported weaker demand and challenges in securing new business. While the manufacturing sector demonstrated some robustness, the agricultural sector experienced a significant decline in orders. Despite the subdued demand, employment continued to grow at a modest rate as firms worked to manage capacity constraints, although optimism regarding future output softened. On the pricing front, inflationary pressures eased, with increases in purchasing and staffing costs slowing to their lowest levels since early 2024. Additionally, selling price inflation dropped to a 19-month low as firms adjusted their pricing strategies to stimulate demand. Meanwhile, supplier delivery times improved for the third consecutive month, reaching levels not seen since September 2023. Looking forward, businesses remain cautiously optimistic, striving to balance cost management with efforts to sustain growth.