Private sector activity expanded in February, accelerating the most in nine months after the phased removal of pandemic restrictions, a survey showed Thursday, but a rise in input and labour costs saw companies raise output prices yet again.
The Stanbic Bank Uganda purchasing managers’ index for the private sector, prepared by IHS Markit, rose to 55.7 from 54.9 in January , signalling an improvement in activity for the seventh month running. A PMI figure above 50 indicates expansion in activity from the previous month.
“A more open economy after the easing of Covid-19 restrictions” boosted demand and led to an increase in output, purchasing activity, and new hires. Businesses were also upbeat about the outlook for future activity.
But the report highlighted persistent inflationary pressures as companies faced higher purchase prices and labour costs. Companies said prices were up for products such as cement, food, fuel, soap, stationary and also electricity and transport. As a result, input costs rose for the seventh straight month — driving up output prices for the sixth consecutive month.
The consumer price index-based inflation rate in February rose 3.2 per cent from a year earlier, the largest increase in 20 monthsm due to an increase in the prices for education services, furnishings, household equipment and routine household maintenance, and restaurants and accomodation services.