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Uganda’s Business Conditions Improve Further, Lead To Growth In Employment– Survey

The Stanbic Purchase Managers Index (PMI) for June 2019 signalled a further improvement in business conditions in the Ugandan private sector. At 57.8 in June, up from 57.3 in May, the survey reflected that Ugandan companies continued to secure greater volumes of output and new orders. In response, firms took on extra staff and purchased additional inputs.

Jibran Qureishi, the Stanbic Bank Regional Economist for East Africa said: “The PMI once again rose to a survey record high of 57.8 in June as economic activity in the private sector remained robust. Indeed, the expansionary fiscal policy outlined in the FY2019/20 budget should continue to support activity especially if the absorption of the development budget improves,” he said.

Adding; “Moreover, the good rains over the past couple of months will also probably bode well for the agriculture sub sector in the second half of 2019. Interestingly, private sector firms in Uganda seemed to have shrugged off the trade standoff with neighbouring Rwanda as they have perhaps realigned their business models and looked for alternative markets.”

Meanwhile, further increases in both input costs and output prices were registered for the month.

Stanbic Fixed Income manager, Benoni Okwenje says the latest reading was comfortably above the survey average of 53.6 at the end of the second quarter.

“Efforts to complete projects on time resulted in a further reduction in backlogs of work. To help in this regard, companies took on extra staff. Industry was the only monitored sector not to see a rise in employment, a picture that was repeated with regards to staff costs,” he said.

According to the survey findings, general improvements in demand and successful advertising campaigns were reportedly behind rises in both output and new orders. Some companies offered additional training to marketing staff. In both cases, growth was signalled across all five monitored sectors.

Alongside higher staff costs, rises in prices for purchases, electricity and water were reported in June. As a result, overall input prices increased, as has been the case in each month since the survey began in June 2016.

The report also shows that output prices also rose as companies passed on higher cost burdens to their customers. Stronger client demand and positive expectations around future activity levels led firms to increase their purchasing activity at the end of the second quarter. Stocks of purchases were also up.

Predictions of further improvements in demand and business expansion plans supported confidence that output will rise over the coming year. Around threequarters of respondents were optimistic regarding the 12-month outlook.


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 service sectors. The headline figure derived from the survey is the Purchasing Managers’ Index™ (PMI™) which provides an early indication of operating conditions in Uganda. The 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%).

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