Private sector output in continued expansion as PMI crosses 55.0 reading

Kampala, Uganda | THE INDEPENDENT | The start of the second quarter of 2023 saw a rise in employment as Uganda’s private sector recorded increased output and new orders with the headline Stanbic Purchasing Managers Index (PMI) rising to 55.4 in April, up from 53.2 in March.

For the sixth successive month, the latest reading is above the 50.0 no-change mark and well above its average since the survey began in June 2016.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.

According to the April report, increasing new business inflows encouraged companies to expand purchasing activity, and for the first time in three months, there was also an expansion in employment. However, a renewed rise in output prices was recorded in April, reflecting the pass through of higher input costs to customers.

Referring to the findings, Mulalo Madula, Economist at Standard Bank said, “Uganda’s private sector performance improved in April, extending the current growth cycle to nine months. Output maintained an upward track, with renewed job creation across sectors halting a two- month sequence of decline. Growth was broad- based, with agriculture, construction, industry, services, and wholesale and retail all showing output growth in April, fuelled by local demand while new export orders fell for the fourth month in a row.”

The Stanbic PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies. The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail and services. The PMI is a weighted average of the following five indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%).