By Wallace Mawire*
Stanbic Bank Zambia has launched the Purchasing Managers’ Index (PMI), a monthly survey of business conditions prevailing in the country, according to Gillian Langmead, spokesperson. It is reported that Zambia is among several sub-Saharan countries in which Stanbic will sponsor the development and delivery of the PMI. Other countries include Ghana, Nigeria, Kenya and Mozambique. In Zambia, the index will be released for the first time in the first week of July 2017.
Stanbic is developing the index in partnership with a London-based company, IHS Markit, a leading firm in the provision of information and analysis to support the decision-making process of businesses and governments around the world. Richard Willis, the Director of Business Development/Economic Indices at IHS Markit, said the index, which will be released at the beginning of each month, will cover the whole economy. “PMI is important because it is the first indicator of business condition.
It is the timeliness and accuracy of the data and its proven methodology that makes it significant. It gives businesses and business-people the best available data to help them make better business and investment decisions,” Willis said. Willis said the index will show changes in the direction various sectors of the economy were moving on a monthly basis.
The PMI is calculated as a weighted average of various economic indicators with readings above 50.0 signalling an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. Stanbic Head of Global Markets, Victor Chileshe, said by launching the PMI, Stanbic was contributing to informed decision making by businesses operating in Zambia while the government and regulators would gauge the impact of their policies on the economy. Mr Chileshe said through the index, Stanbic aimed at improving the knowledge of the business environment in Zambia, which is key to growing the Zambian economy. “As Stanbic, we are happy to launch the PMI.
It will provide an extra piece of information that will allow industry, government and regulators to make informed decisions and plan better as well as to see the effects of some of the policies on the economy,” Mr Chileshe said. The PMI is based on data compiled from monthly replies to questionnaires sent to company executives in private sector companies, which have been carefully selected to accurately represent the true structure of the economy, including manufacturing, mining, services, construction and retail. Survey responses will reflect the change, if any, from month to month.
The PMI has been established in all the major economies of the world as an authoritative and leading indicator of business conditions. It provides the most accurate and most comprehensive suite of economic and key economic indicators, helping policy-makers to make well informed decisions as a well as guiding investment strategy and asset allocation.