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Business confidence surges after ease in lockdown restrictions

Kampala, Uganda | THE INDEPENDENT | Confidence in the country’s business activities surged in July with business owners experiencing more demand for their goods after the country lifted much of the coronavirus restrictions, a survey has said.

The Purchasing Managers’ Index (PMI) published monthly by Stanbic bank recorded a 50.3 points showing positive feelings over the business. This is up from 46.5 points recorded in June. A recording lower than 50 points shows people are less enthusiastic about the business environment. The PMI surveys owners of businesses.

Stanbic says it observed that more businesses have increased their output and are receiving new orders than in the last three months. However, many companies haven’t been able to re-hire the employees they laid off with some of them still laying off some employees.

Kenneth Kitungulu, the Stanbic Bank Uganda head of global markets said in a statement that, the easing of COVID-19 lockdown measures and reopening of public transport contributed to an increase in new orders during July, the first since February.”

He added that “Output also returned to growth during the month, again helped by looser restrictions. The overall increase in activity was centred on the services and wholesale and retail sectors as shopping centres opened, with agriculture, construction and industry posting declines.”

The PMI found that the selling prices increased for the first time in four months as companies passed on higher cost burdens to their customers.

Uganda Bureau of Statistics (UBOS) said in its July consumer price index that transport fares went up by 47 percent when the government ordered the resumption of public transport while food prices that had crashed during the lockdown are gradually recovering as demand rebounds.

Jibran Qureishi, the head of Africa Research, Stanbic Bank said, “The outlook still remains uncertain amidst the Covid-19 pandemic.”

Bank of Uganda has said the full recovery of the economy is expected in 2022. This will also depend on how fast the pandemic can be controlled.

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