By JAMES KUNDA –
LOCAL private sector business activity rose for the first time in April this year, as the negative impacts of the recent cholera outbreak subsided, the latest Stanbic Bank Zambia Purchasing Managers’ Index (PMI) survey data has revealed.
Stanbic said firms continued to win new business at a solid pace amid stronger client demand, subsequently purchasing activity rose and employment stabilised.
The bank said supporting the second consecutive month of overall growth, was an increase in new orders in the sector.
It stated that despite the rate of expansion easing from March, it remained solid and above the series average and the pace of growth accelerating from March, emerging the strongest observed so far this year.
The bank said panel members attributed the improvement in vendor performance to efforts on the part of suppliers to improve customer satisfaction.
“At 51.2 in April, up from 50.7 in March, the headline figure indicated an overall improvement in business conditions in the Zambian private sector.
Business activity entered expansion territory for the first time in four months during April and anecdotal evidence linked the increase to a larger client base and stronger demand,” Stanbic said.
Stanbic bank Head of global markets Victor Chileshe said the solid increase in new business underpinned the improvement in private sector health last month.
Mr Chileshe said the local unit has been under pressure in the latter part of the month and this was likely to cause a rise in input costs this month.
The bank said having contracted in March; workforce numbers remained unchanged last month, with a lack of funds offsetting any increases caused by the volume of new orders.
On the other hand, Stanbic said businesses expanded their purchasing activity in line with efforts to improve operating capacity.
Stanbic said price pressures eased in the sector, with input costs falling for the first time in 19 months, while output prices continued to rise, the rate of increase was marginal and the slowest observed over the current sequence of inflation.
The bank said a decrease in purchase prices underpinned a fall in overall input costs last month, as staff costs rose at a marginal pace and though input prices fell only modestly, it was the fastest observed across the series.
“April saw businesses increase their average selling prices for the third month in a row. Offsetting the effects of the fall in input costs were efforts to increase profits and that said, the rate of output price inflation was only marginal,” the bank said.
Stanbic said supplier delivery times for inputs shortened again at the start of the second quarter, although to a lesser extent than observed in March.
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