Traders crowd Kikubo trading centre in Kampala recently. PHOTO | FILE
|Stanbic survey reports highest recovery since lifting lockdown
What you need to know:
- The survey emphasises Bank of Uganda earlier reports in which it indicated that although the second wave of Covid-19 had halted the momentum recovery, business investment and household expenditure had started to pick up.
October recorded higher than usual economic activity, signaling a third successive improvement in business conditions after the Covid-19 lockdown in June, according to Stanbic Bank.
During the month, according to the Stanbic Purchasing Managers’ Index, which measures monthly performance of the economy, headline reading rose to 54.6 in from 52.5 in September.
The reading released yesterday indicates that the score was above average and above the 50 mark threshold.
During October, according to the survey, output and new orders increased for the third month in a row due to an increase in customer numbers, facilitating a return to near business normality.
A rise in new orders, the survey noted, encouraged companies to expand purchasing activity for the first time in five months, leading to accumulation of inventories.
During the period, companies reported a third successive monthly improvement in vendor performance with firms in construction and wholesale & retail securing purchased items more quickly than in September.
However, the survey noted that employment continued to fall in October as some firms were reluctant to hire additional staff amid cost pressures.
Workforce numbers decreased for the fifth month running, with employee expenses also going down.
Mr Ronald Muyanja, the Stanbic head of trading, said growth was spread across all the five broad sectors covered by the survey.
The survey measures performance in construction, retail and wholesale trading, agriculture and employment, among others.
The survey further revealed that efforts by companies to keep on top of workloads were generally successful in October as signalled by a further reduction in backlogs of work.
During the period, the survey also reported an increase in purchase prices with interviewed managers and procurement officers reporting a rise in the cost of cement, fuel, stationery, sugar and assorted food products.
This as a result, saw companies raising selling prices with price increase now recorded in the last two months.
Agriculture, industry and wholesale & retail products recorded the highest prices increase. However, declines were seen in construction and services.
