Zambia’s purchasing manager index has continued to weaken according to the recently updated PMI score for April 2019 updated in the first week of May and available on the Bloomberg Terminal (Ticker code: MPMIZMWA).
Following its peak (above 50 which is bullish) in February of this year, the last two months show a continued slide into bearish territory. February recorded a PMI of 50.5 while March recorded 48.1 with April sliding further down to 45.2. However, this is not the lowest it has been as October 2018 was the weakest month in the last 1 year.
When compared to one of Zambia’s major trading partners, South Africa has also been grappling with a weakening PMI. However, a closer look at the last two months reported results indicates the Zambia and South Africa have swapped scores as the latter’s PMI has been on the ascendancy albeit in the weak territory of below 50. South Africa recorded a PMI of 47.2, according to the April 2019 data compiled from Bloomberg Terminal.
The index which tracks sentiment among purchasing managers in manufacturing, construction, and services industries is calculated from the results a survey on production, orders, inventories, employment, prices among other metrics.
Purchasing managers often look at prevailing exchange rates when making decisions on their inventories. A currency spot check on the Zambia Kwacha and South African Rand the last 4 months, shows the kwacha on a gradual ascent while the rand has had a volatile ascent. When pitted together, the local currency has depreciating against its South Africa peer since March 2019.