By Ambrose Gahene
The headline Stanbic Bank Uganda Purchase Managers Index (PMI) for Uganda; indicates there has been an improvement in private sector business operating conditions in the country following a rise from 52.8 to 54.3 in July.
The index posted above the neutral 50.0 threshold for the sixth consecutive month, supported by expansions in new orders, output, employment and stocks of purchases.
Speaking about the main drivers of the PMI’s continued growth Jibran Qureishi, Regional Economist East Africa at Stanbic Bank said; “The recent recovery is underpinned by the agriculture sector following the relatively decent long rains. That being said, the manufacturing and retail sectors are still sluggish but are likely to gradually recover as access to credit improves over the course of the year. In addition to this, government expenditure on public infrastructure projects is also likely to support economic activity over the near to medium term.”
Analyzing the performance of some of the other key sectors in Uganda’s economy, Anne Juuko Stanbic Banks head of Global Markets revealed that; “Growth in the industry and service categories was maintained in July. However, the wholesale and retail sector recorded no change in business conditions, following a contraction in June.”
Looking at overall employment Juuko noted; “The ongoing upturn in output continued to feed into the labour market, as employment growth in four of the five monitored sub-sectors more than offset a reduction in staffing levels in the wholesale and retail sector.”
On the price front, overall input prices rose at the start of the third quarter. Inflation was recorded across all five sub-sectors monitored by the survey. Subsequently, output charges rose during July, but firms were restricted in their ability to fully pass on higher cost burdens to clients amid reports of strong competition.
The Stanbic PMI is a composite index, calculated as a weighted average of five individual sub-components: New Orders (30 per cent), Output (25 per cent), Employment (20 per cent), Suppliers’ Delivery Times (15 per cent) and Stocks of Purchases (10 per cent). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.
About Stanbic Bank Uganda
Stanbic Bank Uganda is a member of the Standard Bank Group, Africa’s largest bank by assets. Standard Bank Group reported total assets of R1,98 trillion (about USD128 billion) at 31 December 2015, while its market capitalization was R184 billion (about USD11,8 billion).
The group has direct, on-the-ground representation in 20 African countries. Standard Bank Group has 1 221 branches and 8 815 ATMs in Africa, making it one of the largest banking networks on the continent. It provides global connections backed by deep insights into the countries where it operates.
Stanbic Bank Uganda provides the full spectrum of financial services. Its Corporate & Investment Banking division serves a wide range of requirements for banking, finance, trading, investment, risk management and advisory services. Corporate & Investment Banking delivers this comprehensive range of products and services relating to: investment banking; global markets; and global transactional products and services.
Stanbic Bank Uganda personal & business banking unit offers banking and other financial services to individuals and small-to-medium enterprises. This unit serves the increasing need among Africa’s small business and individual customers for banking products, that can meet their shifting expectations and growing wealth.