For the tenth successive month the Ugandan private sector registered growth, with the Stanbic Uganda PMI index for November rising from 52.8 to 54.9.
The increase was attributed to higher underlying demand, resulting in higher volumes of new orders, purchases of stocks across the agriculture, construction industry, services and wholesale & retail sub-sectors.
Commenting on November’s survey findings, Jibran Qureishi, Regional Economist E.A at Stanbic Bank said, “Business conditions continued to improve in the month of November buoyed mainly by rising new orders which boosted output to its highest level since October 2016.
In fact, with the end of the political deadlock in neighboring Kenya which remains a key trading partner for Uganda, new orders and output should continue to rise over the coming months. In addition, stable macroeconomic conditions with subsiding inflation should also continue to bode well for Uganda’s private sector.”
The Uganda Bureau of Statistics UBOS Consumer Price Index report for November indicated that there had been a drop in overall inflation from 4.8% to 4%.
In a major development, for only the second time in the surveys 18 month history Ugandan exports increased.
This was attributed to continued improvements in the quality of finished products.
Ugandan exports had been on a steady decline as a result of the political impasse in Kenya and outbreak of war in Southern Sudan which had been Uganda’s main export market and trade route to Sudan which is the second largest buyer of Ugandan coffee.
Analysing the employment figures, Okwenje Benoni Stanbic Banks Fixed Income Manager revealed, “Driven by higher demand, companies increased capacity further in November resulting in an expansion of workforce numbers. Businesses were therefore able to cope with the rise in new orders and work through their backlogs.”
“In a Further reflection of the positive economic environment, businesses increased their purchasing activity for the sixth consecutive month. Consequently, stocks of purchases increased in line with the survey trend,” Benoni added.
The Stanbic PMI is a composite index, calculated as a weighted average of five individual sub-components: 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 show deterioration.