Activity dipped for traders across Africa. Uganda was also affected Business activity declines in January – first time in seven months in Uganda
New orders and employment fall
Companies still optimistic regarding 12 months outlook
Kampala, Uganda | THE INDEPENDENT | Business conditions deteriorated for the first time in seven months for the Ugandan private sector in January due to a reduction in new orders.
The reduction caused a fall in employment as the country went through the general elections period. The headline Stanbic Purchasing Managers’ Index (PMI) dipped below the 50.0, posting a reading of 49.8 from 51.2 in December 2020.
The PMI report, released this week, contains the latest analysis of data collected from the monthly survey of business conditions in the Ugandan private sector.
Ferishka Bharuth, Economist – Africa Regions at Stanbic Bank said, “New orders dropped in January, thereby ending a six-month sequence of expansion. According to respondents, a lack of client activity around the election period was one factor acting to reduce new business.
“The election period also dampened activity at some monitored companies, but overall output continued to increase. Growth was recorded in the agriculture and industry categories, but falls were seen in construction, services and wholesale and retail,” she said.
Using findings from about 400 respondents, the report contains the latest analysis of data collected from the monthly survey of business conditions in the Ugandan private sector.
The survey is sponsored by Stanbic Bank and produced by IHS Markit. It has been conducted since June 2016 and covers the agriculture, industry, construction, services, wholesale and retail sectors.
Stanbic Bank Uganda is part of the Standard Bank Group, Africa’s largest bank by assets. The group has direct, on-the-ground representation in 20 African countries and in 5 global financial centres.
What is the PMI? 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%). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.However, in spite of some signs of weakness at the start of the year, firms remained confident that output will rise over the next 12 months. For Instance, in the agriculture and industry sectors, outputs rose whereas construction, services and wholesale and retail saw a decrease.According to the January report, with new orders down, companies scaled back their […]
