Stanbic Bank’s Purchasing Managers’ Index released on Wednesday indicated that that the pace of growth has been slowing in the last three months.
Commenting on August’s survey findings, Jibran Qureishi, Regional Economist for East Africa noted that while Uganda’s private sector is still growing, the pace of acceleration has been slowing down over the past three months.
Qureishi said the exchange rate volatility in June and July exchange largely culpable largely caused the slow down for those two months.
Qureishi also noted observed that the sporadic riots in parts of the country over the last month could have disrupted trade and business in various parts of the country.
He says a more stable political environment could help the private sector return to more solid growth, similar to the early part of the year.
Bobi Wine was in mid-August was arrested alongside 33 others on allegations of storning President Yoweri Museveni’s motorcade in Arua. Their arrests sparked of a number of riots following allegations of torture by the police and Army.
The Stanbic Bank PMI report for the month of August has signaled further improvement in the health of Uganda’s private sector.
The report indicates the headline figure posted 52.1 in August, down from 53.2 in July.
The 52.1 score was however slightly below the average of 52.8 since June 2016. Of the five broad sectors surveyed, Construction, Industry and Services all saw improving business conditions, while Agriculture and wholesale and retail both reported deterioration since July.
The month of July saw a general decline in Maize prices with a kilo of maize growing for as low as 150 shillings.
Firms frequently linked improving business conditions to stronger underlying domestic client demand which led to expansions in output, new orders and employment during the most recent survey period.
The report further notes that despite a higher volume of incoming new work in August, private sector companies in Uganda were able to reduce the level of outstanding business partly reflected in the further increase in employment.
According to Benoni Okwenje, the Stanbic Bank Fixed Income Manager, “Increasing client demand from domestic sources led to a further rise in new orders across Uganda’s private sector during August.
The Industry and Services sectors reported improvements. Meanwhile, new orders from abroad deteriorated in the latest survey period. Output continued to increase in August, with all sectors except Agriculture reporting growth.