In Summary
  • "While there have been signs of a pick-up in private sector lending by commercial banks, the high non performing loan ratios within the banking sector will probably keep the recovery moderate. That being said, an increase in public investment expenditure keeps up optimism that Growth Domestic Product growth will remain on upward trajectory over the coming year,”
    Jibran Qureishi, Stanbic Bank’s regional economist for East Africa.

Kampala. Business activity slowed down in December due to increased prices in the sectors surveyed.
The sectors surveyed include: Agriculture, services, wholesale and retail, construction and industry.

According to Stanbic Bank Uganda’s monthly Purchasing Managers’ Index (PMI) – a survey that provides an indication of operating conditions in the country – December registered 54.3 per cent, a slight decline in performance from the 54.9 per cent recorded in November 2017.

“…overall input prices increased across all five sub-sectors in December. Rises in cost burdens reflected increases in both purchase prices and staff costs,” the PMI index noted.

The PMI, albeit with a slight decline, continues to show further improvement in the health of the private sector. At 54.3 in December down from 54.9 in November, the headline figure remained above average as output new orders, employment and purchases of stocks all contributed to the above 50.0 figure.

Mr Jibran Qureishi, Stanbic Bank’s regional economist for East Africa, said the PMI has averaged 54.0 in the fourth quarter of 2017, up from an average of 52.4 in the nine months to September, as economic activity gradually improves.

Mr Benoni Okwenje, Stanbic Bank’s fixed income manager, said improvements in operating conditions were broad-based, as the five monitored sub-sectors each registered stronger business conditions.

“Growth in the volume of new orders received by Ugandan private sector companies continued in December. Amid political tensions in key trading partners, total new business was boosted by export orders for the second successive month,” Mr Okwenje said.