A gauge of business activity in Uganda climbed to its highest level since November, pointing to a return to normal operating conditions as the general elections recede and some service sectors reopen close to a year after restrictions were imposed to contain the coronavirus.
The Stanbic Bank Uganda purchasing managers index , a key measure of business conditions in the private sector, rose to 53.2 in March from 51.2 in February, according to data released by IHS Markit, the global research firm. The PMI reading is the highest since November and the second straight improvement in business conditions.
The rise in the index, the second in as many months, signals “that the economic recovery is gaining momentum as conditions gradually return to normal,” said Ferishka Bharuth, the economist for Africa regions at Stanbic Bank.
“Notably, after five months, March’s PMI reading is supported by increases across all [the] five sub-components of the index,” Ms Bharuth added.
Businesses pointed at an increase in new orders for the second successive month, driven by an increase in customer numbers. In turn, they purchased and hired more. However, IHS Markit said staff costs decreased but did not provide an explanation for why this was the case.
An increase in the prices of electricity, water, cement, and food items drove up purchase costs for private sector entities. But it is customers who paid the price for the higher prices as businesses passed on the burden to them, raising output prices for the third consecutive month.