Zambia’s private sector slips into contraction on the back of weak demand, according to Purchasing Managers Index

Zambia’s private sector returned to contraction territory in March as business conditions worsened, prompting companies to scale back on input purchases and inventories.

According to the Stanbic Bank Purchasing Managers’ Index (PMI), the index fell to 49.3 in March from 50.9 in February, signalling a deterioration driven by falling output and new orders.

Firms cited weak client demand and challenges in securing new business, particularly in the agriculture sector.

Despite continued modest employment growth, businesses remained cautious, cutting back on purchasing and stock levels.

Selling price inflation eased to its lowest point in 19 months, with firms adjusting prices to stimulate demand.

“Inflationary pressures eased, with slower increases in input costs and selling prices,” the PMI noted.

Business confidence also weakened amid uncertainty over future growth. While manufacturing showed some resilience, agriculture saw a notable drop in orders.

On the cost side, both purchase and staff costs rose at their slowest pace since early 2024. Supplier delivery times improved for the third consecutive month, reaching levels last seen in September 2023.

“Looking ahead, businesses remain cautious, balancing cost management with efforts to sustain growth,” the report stated.

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