Kampala, Uganda | THE INDEPENDENT | Uganda’s private sector activity increased for December 2018 signalling improved business environment.
The Stanbic Bank Purchasing Manager’s Index (PMI) for manufacturing and services rose to 56.6 for December from 55.7 recorded in the previous month owed to increased demand for various products and services. Anything above 50 denotes growth; anything below, contraction. This triggered companies to increase their staffing levels, purchasing activity and inventories during the month.
Four of the five broad sectors covered by the survey – agriculture, industry, construction, wholesale & retail and services sectors – saw employment rise, the exception being construction. Commenting on the survey findings, Jibran Qureishi, the regional economist E.A at Stanbic Bank said it has been a strong finish for the private sector in 2018 despite of the rising costs of operations.
He said the performance suggests that the underlying demand has significantly improved and perhaps also justifies the Monetary Policy Committee maintaining a hawkish bias in light of these risks that could feed through into core inflation.
Last month, the Bank of Uganda maintained its central bank rate at 10 % saying the outlook for inflation had improved.
The bank’s head of Fixed Income, Benoni Okwenje said overall input prices increased again in December, with rises in both purchase prices and staff costs contributing to overall inflation.
“Where purchase prices rose, companies reported higher fuel costs and increased prices for raw materials such as food items and cement,” he said. The survey, sponsored by Stanbic Bank and produced by IHS Markit, has been conducted since June 2016 and covers the agriculture, industry, construction, wholesale & retail and services sectors.