By Silvia Nyambura
Uganda’s private sector is recovering from the effects of the last election cycle and the global economic slowdown, the Stanbic Bank Purchasing Managers’ Index (PMI) report for March 2017 has revealed. Released in conjuction with Markit, one of the world’s leading financial information services providers, the report is a composite index, calculated as a weighted average of five individual sub-components These include, New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%). Readings above 50.0 signal an improvement in business conditions on the previous month while readings below 50.0 indicate a deterioration.
Uganda recorded a 53.5 signal in March up from 50.9 in February, pointing to further improvement in business conditions at Ugandan private sector firms. However, the average headline PMI reading for the opening quarter as a whole (50.7) was below that for the prior quarter (53.1). Improved operating performances were signaled for the agriculture, industry, services and wholesale & retail sectors during March.
In addition, according to Anne Juuko, Stanbic Bank’s Head of Global Markets, further job creation was registered in March. Staffing levels rose in agriculture, services and wholesale & retail sectors whereas lower employment was registered in the industrial sector. She however explained that the higher overall employment levels indirectly led to an increase in staff costs with the larger workforce being the primary reason behind depletion of outstanding business in the month under review.
On the prices front, overall costs continued to increase during March. Apart from rising wages, cost increases reflected higher purchase prices, a by-product of rising input buying activity by Ugandan companies.
Speaking at the launch of the PMI at the Sheraton Kampala Hotel yesterday, Patrick Mweheire, Chief Executive Stanbic Bank Uganda said, “The index is premised on providing the earliest, most accurate and most comprehensive suite of economic indicators in the country. It will allow policy makers and businesses to make well informed decisions. Equally, the key indicators will provide a solid basis for investment strategies and asset allocation. Ugandan companies stand to benefit tremendously from the survey because the information compiled is current and has been gathered first hand by a team of experts working in partnership with 400 of the country’s leading companies.
