Stanbic Bank in conjunction with Markit, one of the world’s leading financial information services providers, launched a monthly survey of business conditions in the Ugandan private sector.
The headline figure derived from the survey known as the Purchasing Managers’ Index™ (PMI™) will provide an early and accurate indication of business trends in the country. It 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 indicate a deterioration.
Speaking at the launch of the PMI in Uganda, 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 complied is current and has been gathered first hand by a team of experts working in partnership with 400 of the country’s leading companies,” he added.
Presenting the inaugural PMI report for March 2017, Anne Juuko Stanbic Bank’s Head of Global Markets said the latest figures show that Uganda’s private sector is recovering from the effects of the last election cycle and the global economic slowdown. At 53.5 in March up from 50.9 in February, the seasonally adjusted PMI pointed to further improvement in business conditions at Ugandan private sector firms in March. The average headline PMI reading for the opening quarter as a whole (50.7) was below that for the prior quarter (53.1). The Headline index has now signalled expansion in nine out of the ten months of data collection. Improved operating performances were signalled for the agriculture, industry, services and wholesale & retail sectors during March.
Looking at the employment figures she noted that with new orders increasing further job creation was registered in March. Staffing levels rose in Agriculture, services and wholesale & retail sectors whereas lower employment were 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 March.
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, UBOS Director Macroeconomic Statistics Dr. Chris Mukiza, welcomed the launch of the PMI report which will add to the body of research data. “I am pleased to confirm that the information has been collected diligently and to UBOS standards.”
“We encourage such initiatives because they supplement the work being done by Government agencies and policy makers to get a real-time understanding of how the private sector is performing. This will help us to put in place the interventions necessary to stimulate private sector driven growth which is a national priority,” he said.
Mr. Kenneth Egesa, the director of Statistics in Bank of Uganda commended Stanbic Bank for its contribution to the development of economic indicators. “We live in a highly dynamic world where the quest for timely economic indicators seems insatiable, by providing additional timely and reliable indicators, both business executives and policy makers are able to make more relevant decisions that can positively impact their organizations and the entire economy.”
“PMIs by their nature provide price expectations to the various market players which is an important consideration for the central bank as it pursues price stability especially under a forward looking framework. We applaud you for taking on this important task and look forward to using this information in our policy analysis.” He concluded
PMI will be released by Stanbic Bank on a monthly basis and will be available on the bank’s website http://www.stanbicbank.co.ug on the day of the official presentation.