The end of the election season and preparations for a wider school return were behind a rebound in business sentiment last month, according to a monthly survey.
After dropping to a seven-month low in January , largely due to uncertainty about the general elections, activity in Uganda’s private sector improved in February. The Stanbic Bank Uganda Purchasing Managers’ Index — a widely watched measure of business sentiment — rose to 51.2 in February, up from 49.8 in January.
The reading is above the 50 mark which separates an improvement or decline in activity; readings below 50 indicate a decline in activity.
The improvement in business conditions was attributed to the end of the election season and preparations for a wider reopening of schools — learners in classes just below final year students, so-called ‘semi-candidates’, joined candidates at school in late February . Data for the index was collected between 11 and 25 February.
Activity increased in the agriculture and industry sectors but declined elsewhere, according to a report from IHS Markit, the research firm that conducts the survey.
New orders and employment both returned to growth — the latter reversing a two-month decline — while output improved for the eighth straight month. Purchasing activity at firms also rose for the first time in three months.
The reading is based on an aggregate of survey responses from managers at 400 private sector companies drawn from the agriculture, mining, manufacturing, construction, wholesale, retail, and services sectors.
The managers are asked whether five variables — new orders, output, employment, suppliers’ delivery times, and stocks of purchases — have increased, stayed the same, or decreased compared to the previous month.
