Business activity in Uganda’s private sector slowed in October as the services, wholesale, and retail sectors all reported a decline in activity, according to a closely watched survey.
The Stanbic Bank Uganda Purchasing Managers’ Index – a gauge of activity in the private sector – slowed to 52.4 in October, down from 52.9 in September, global data firm S&P said Friday. A reading below 50 indicates contraction, while a reading above 50 indicates growth.
Christopher Legilisho, economist at Stanbic Bank, said the wholesale and retail sectors reported declines in employment, new business and output – leading to the slower growth in private sector activity.
Nevertheless, output and new orders rose for the fifteenth month in a row across all sectors, reflecting the continued upturn in customer demand.
According to the report, firms increased staffing levels – for the seventh month in a row – in response to the rise in new business. Purchasing activity increased and firms reduced their backlogs of work. However, all this was accompanied by an increase in input costs, which firms passed on to customers.
The rains during the month lengthened suppliers’ delivery times.
A clear majority of purchasing managers believe that private sector activity will continue to expand over the next year, underpinned by rising demand.
