Zambian private sector growth hits a six-month high

Investing.com – Based on the latest purchasing manager index data released Tuesday by Standard Chartered Bank and S&P Global, Zambia’s private sector recorded the strongest improvement in the business environment in six months in March.

The purchasing manager index rose from 49.3 in February to 51.4 in March, returning to the expansion range above the 50.0 threshold. This improvement represents the strongest growth since September 2025.

The improvement was driven by the renewed expansion in current-month output and new orders. Zambia businesses reported that this was the second increase in activity within six months, attributing the growth to renewed expansion of new business. New orders expanded at the fastest pace since September 2025, supported by successful advertising campaigns and stronger client demand.

Despite the overall improvement, output in the manufacturing sector and in wholesale and retail still declined.

Employment fell at the fastest pace since September 2024, although business confidence strengthened to the highest level since May 2025. Businesses attributed the optimism to expectations of further improvement in client demand.

In terms of pricing, total input costs were broadly unchanged, as lower purchase prices offset higher wage bills. Due to incentive and cost-of-living subsidies, wage costs rose at the fastest pace in six months, while favorable exchange-rate movements caused purchase prices to decline for the second consecutive month.

Output prices fell at the fastest pace since May 2020, as firms sought to remain competitive and pass cost savings on to customers.

The expansion in new orders led to a renewed rise in backlogs. In response, firms increased purchasing of inputs at the fastest pace in four months and built up purchasing inventories to support the anticipated rise in customer demand.

Supplier performance deteriorated for the first time since December 2024, due to road freight transport delays and international supply-chain disruptions caused by the war in the Middle East.

The data collection period was March 12 to March 25.

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