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The demand for goods and purchasing activity significantly in October a welcome sign for the economy that has stuttered due to global supply constraints and after effects of Covid-19.
According to the Stanbic Bank Purchasing Manager’s Index, the private sector reported increases in output and new orders.
Christopher Legilisho, an economist at Stanbic Bank said Uganda’s October PMI indicated a further improvement in private-sector activity, with both output and new orders rising for a 15th consecutive month due to solid client demand.
“Private-sector hiring increased for a seventh month running, with firms having hired more staff on permanent and temporary bases to handle increasing orders and purchasing activity as well as to reduce backlogs,” he said.
The Stanbic Bank PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies.
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The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail and services.
“Of the surveyed sectors, only the wholesale and retail sectors recorded a dip in employment, new orders and output. Still, business confidence is high across the sectors on the outlook for customer demand and output over the next 12 months,” Legilisho said.
He said operating expenses increased on the back of higher purchase prices (often linked to fuel), wage bills and construction material costs. In turn, companies raised their own charges, thereby extending the current sequence of output price inflation to seven months.