Zambian Private Sector Activity Improves to 6-Month High
Zambian private sector firms recorded a fresh improvement in business conditions in March, according to the latest Stanbic IBTC Purchasing Managers’ Index (PMI) data released by S&P Global.
According to the report released today, the Zambian private sector delivered the greatest improvement in business conditions for six months in March
The upturn was driven by renewed expansions in output and new orders, with firms seeing a rise in input buying in response.
That said, previous declines in new sales weighed on hiring, leading to a decline in employment. Nonetheless, companies were more confident of a rise in activity over the coming year.
On the price front, total input costs were largely unchanged, as a fall in purchase prices was offset by higher wage bills. Firms continued to cut output charges, however, and to the largest degree in almost six years.
In March, the PMI posted at 51.4, up from 49.3 in February and signalled the strongest improvement in the health of the private sector since last September. Underpinning overall growth was a return to output expansion in March.
Zambian companies indicated only the second rise in activity in six months, with panellists linking the upturn to a fresh increase in new orders.
Meanwhile, Zambian firms recorded a solid expansion in new business at the end of the first quarter. Successful advertising campaigns and stronger client demand reportedly drove the upturn, according to anecdotal evidence.
Although the upturn in new sales was broad-based by sector, lower output was registered in the manufacturing and wholesale & retail segments.
Inflationary pressures remained subdued in March, as Zambian companies registered broadly stagnant overall input prices and a further decline in output charges.
Although wage bills rose at the fastest pace in six months due to motivational and cost-of-living payments, favourable exchange rate movements led to another monthly decrease in purchase prices.
In an effort to remain competitive and pass through cost savings, selling prices declined at the quickest rate since May 2020. At the same time, business confidence strengthened, with the degree of positivity the highest since May 2025.
Hopes of further improvements in customer demand drove optimism, according to Zambian companies. That said, firms cut their staffing levels at the quickest pace since September 2024 in March.
Nonetheless, the expansion in new orders spurred a fresh rise in backlogs of work in March. In response, firms raised their input buying and increased stocks of purchases to support further anticipated upturns in customer demand.
Purchasing activity grew at a modest pace, but one that was the fastest in four months. Longer delivery times due to road transportation delays and disruptions to international supply chains amid the war in the Midde East led to a renewed decline in vendor performance in March.
The extent of the deterioration was only fractional, but the greatest since December 2024.
Commenting, Musenge Komeki, Head of Sales at Stanbic Bank said: “Zambia’s private sector saw a modest recovery in March 2026, with business conditions improving as new orders and output returned to growth, pushing the PMI back above the 50.0 neutral threshold.
“Broadly stable total costs, falling selling prices and stronger business confidence supported the upturn, although firms continued to reduce staff with lingering wage cost pressures and fresh supply chain delays.” U.S. Tech Giants’ AI Spending to Hit $700 billion
