Growth in Uganda’s private sector broadly continued at a steady pace in November underpinned by an increase in demand, according to a monthly gauge.
The Stanbic Bank Uganda purchasing managers’ index recorded a robust rise of 55.7 in the month, although its rate of growth moderated from October’s when it improved at its fastest rate ever. It’s still above the 30-month survey average of 53.1 and also marks the 22nd straight month it has exceeded the 50-point level separating improvement from contraction.
Output rose across four of the five broad sectors surveyed, declining in construction, according to IHS Markit, the index’s producer. This was due to a rise in customer demand, which was also the driver of an increase in new orders across all sectors.
The rise in new business saw firms hiring more workers and reducing backlogs. Agriculture, services, and wholesale and retail saw an increase in employment, while construction recorded a decline. In industry, staffing levels were unchanged.
However, staff costs and input prices continued increasing, driving up overall costs of production. This was passed on to customers as firms raised the prices of their output, with the only exception being firms in construction.
Stanbic Bank’s economist for East Africa, Jibran Qureishi, said the improvement in business conditions in November was due to “a combination of a more stable exchange rate and improving agricultural productivity.” These could continue to underpin growth this month, he said.
