By Ambrose Gahene
The Ugandan Private Sector registered an improvement in Business conditions in October. There were increases in output, new orders, employment numbers and stock purchases. The headline Stanbic bank PMI index registered a 52.8 reading.
Releasing the October Stanbic bank PMI findings, Jibran Qureishi, Stanbic Bank’s Regional Economist for East Africa revealed; “We continue to see a gradual improvement in business conditions within the private sector in Uganda, although the pace of improvement has slowed down somewhat since August. We attribute this to the prolonged political impasse in Kenya which is by far Uganda’s leading trade partner. ”
He continued; “However, as political unrest in Kenya subsides in the coming months, following the conclusion of the repeat Presidential elections and public expenditure on infrastructure in Uganda starts rising, growth will most likely return to a much faster upward trajectory.”
Uganda is currently undertaking the construction of a number of large scale infrastructure projects with many more in the pipeline, key to their successful execution is the port of Mombasa which accounts for about 70 per cent of all imports. Political instability in Kenya tends to slow down processing times considerably at the port, leading to project delays with many contractors lacking the much needed raw materials and equipment necessary to carry out construction.
Analyzing the five monitored sectors Okwenje Benoni, Stanbic Banks Fixed Income Manager noted; “Agriculture, services, construction, wholesale and retail registered significant increases in output. In response companies attempted to cope with higher demand by increasing capacity by expanding employment which resulted in higher jobs figures.”
Meanwhile, inflationary pressure was evident again as overall input costs rose for the seventeenth consecutive month. Evidence suggested that input price inflation was driven by both higher purchase costs and rising salary payments.
The Stanbic bank 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 capitalisation 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 and 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 and 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.