Moza business confidence up

The Business Confidence Index constructed by KPMG showed a rise from 101.25 points in the first quarter of 2006 to 101.55 in the second quarter. The index stood at the base figure of 100 in the third quarter of 1999, and again at the end of 2000. So it can be seen that in the second quarter of 2006 there was a rise in confidence of 0.3 per cent.

The most upbeat companies were those in communication, information and IT with an index of 110.17.

The next most confident group of companies were in trade and services, with an index of 105.32 – but this was a decline of 11.9 per cent on the first quarter figure of 119.54. Industry too showed a tiny decline – from 109.93 to 103.47. ‘ AIM.

a drop of 5.87 per cent.

At the pessimistic end of the scale were businesses in agriculture and fisheries, with an index of 96.66 (nonetheless, this was a 0.25 improvement on the first quarter figure).

The hotel and tourism sector slumped from 106.37 to 96.81, a fall of 8.99 per cent, while the building industry showed a decline in confidence of 3.85 per cent, falling from 101.17 to 97.28.

The companies were asked about 41 factors impinging on their business. The ones they were most optimistic about were market demand for their products (an index of 117.98), the domestic political situation (117.35), and contract compliance (112.31).

That there was a 2.88 per cent improvement in perceptions of contract compliance between the first and second quarters is extraordinary. For one of the regular complaints raised at the annual conferences of the Mozambican private sector has been precisely the difficulty of enforcing contracts, due to the slowness and inefficiency of the judicial system.

The greatest concern was the level of crime. The perception of personal safety fell by 3.66 per cent to an index of 81.19, and of organised crime by 5.24 per cent to 82.72.

The survey also went into the risky business of predictions.

Companies were asked what impact they thought the behaviour of the Mozambican currency would have on their business in the third quarter of the year. Most were pessimistic – with 40 per cent predicting a negative impact, and 13 per cent a “very negative” impact.

October 2006
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