The imminent re-opening of schools to take in non-candidate classes has ignited business confidence and supported a return to growth in employment Kampala, Uganda | THE INDEPENDENT | The private sector has become more optimistic about its businesses for the next few months following a troubled period between December and January. The two months were characterized by job cuts as companies implemented cost-cutting measures in response to the Covid-19 pandemic according to a monthly survey, the Purchasing Managers’ Index (PMI).
“Private sector optimism picked up during February ending a two-month sequence of job cuts and leading to an improvement in the Purchasing Managers’ Index (PMI) to 51.2 from 49.8 in January,” says the index produced by IHS Markit, a global industry information firm.
The PMI is a measure that provides an early indication of operating conditions in Uganda. The purchasing managers increase or reduce their purchasing activities based on what the company plans to do and how they see the market in the next few days. Activities are declining and the outlook negative when the index falls below the 50.0 mark, and anything above that mark signifies a positive outlook based on the activities of companies.
The index is now above 50.0 signifying a positive outlook compared to the same period in January. In the survey done in February, the managers interviewed indicated that a rise in new orders and a move towards normalcy following the election period is behind the increase in activity.
“Particularly, the imminent re-opening of schools to take in non-candidate classes (expected in the coming months) has ignited business confidence and supported a return to growth in employment,” says the index.
There is a rise in staffing levels especially as schools prepared for increased activity and these have led to higher employee expenses, higher purchase costs for items such as foodstuffs, stationery and liquid soap according to the survey. “Preparations for a wider reopening of schools is supporting a return to growth.
This new business has led to a rise in output in February (the eighth in as many months) particularly in the agriculture and industry sectors. We however continue to see a decline in activity elsewhere,” says Ronald Muyanja, the Head of Trading at Stanbic Bank Uganda.
The violent events that marred the campaign period saw dozens of people killed and some properties destroyed in and around Kampala, forcing the business community to scale down on activities as others temporarily closed […]
