A gauge of activity in the Ugandan private sector declined for the second month in a row, but continued to show expansion.
The Stanbic Bank Uganda purchasing manager’s index fell to 51.7 in February from 54 in January, S&P Global said Tuesday. A reading above the neutral 50 mark indicates expansion, while a reading below suggests contraction.
The rate of private sector expansion in February is the softest since last August, as activity weakened amid softer demand and a decline in agricultural output. In addition, staff costs fell for the second month in a row — the second time in 18 months — although hiring increased for the eleventh month. However, hiring declined in the agricultural and construction sectors.
Still, business activity strengthened for the sixteenth straight month, with both output and new orders rising for the nineteenth consecutive month, said Christopher Legilisho, economist at the Standard Bank Group.
Firms reported an increase in purchasing activity, although the stock of purchases fell for the first time in three months. Input costs also rose, driven by higher prices for fuel, materials and utilities. As a result, most firms increased their selling prices, with the exception of the construction sector.
