Uganda’s private sector grew at a faster pace in July as output and new orders picked up for the fourth month running, according to a closely watched business survey.
All five sub-sectors monitored reported growth in both output and new orders, improving on June when only wholesale & retail, industry, and construction recorded gains. Price pressures also intensified, as firms passed on higher wage and purchase costs.
The Stanbic Bank Uganda purchasing managers’ index, published by large data provider S&P Global, came in at 53.7 in July, up from 51.9 in June and the fourth consecutive monthly expansion. The 50-point level separates contraction from expansion.
“The July PMI showed a robust private sector economy performance. For the fourth month now, surveyed firms have reported strong output and new orders, linked to strong client demand conditions across all economic sectors in July, with firms upbeat that client demand conditions will persist over the next 12 months,” Christopher Legilisho, economist at Stanbic Bank, said.
S&P said companies had reported a further rise in input prices, driven by higher food, utilities, rents and timber prices, as well as an increase in wage bills. Wage costs rose across in all sectors except industry, while only construction reported an increase in purchase costs.
“Despite higher purchase costs, firms raised their input buying in July, as pre-production inventories also grew amid efforts to stockpile materials. An eighth successive monthly improvement in suppliers’ delivery times aided firms’ efforts to build safety stocks,” the report said.
The monthly gauge is compiled from responses to questionnaires sent to purchasing managers in a panel of around 400 private sector companies. Sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail, and services.
