Manufacturing inflation increases to 31 per cent

The increase in manufacturing inflation has been attributed to the general spike in the cost of doing business in Uganda.

Kampala

Ugandans paid higher prices for manufactured products in the last 12 months due to high production costs arising mainly from a hike in raw material prices and persistent load shedding, a report from the Uganda Bureau of Statistics shows.

The Producer Price Index for Manufacturing (PPI-M) released yesterday indicates that producer prices for goods manufactured rose to 31.9 per cent in the fourth quarter of 2011 (October - December) compared to the same period in 2010.

Ms Imelda Atai Musana, the director business and industry statistics at Ubos, said the high raw material prices and the frequent power outages that forced manufacturers to resort to running generators to support their production processes forced industrialists to transfer the high costs to the final consumer in form of high product prices.

Significant price increases in the sector were registered in processed food items including; sugar due to increased demand for the product in both local and regional markets, especially South Sudan and the DRC and a rise in prices of vegetable oils due to increased cost of imported crude oil.

Other price increases were registered in chemical products due to a rise in prices of soap, processed coffee, fish and drinks and tobacco. Meanwhile, prices in the construction sector also rose by 32.9 per cent over the same period.

fkulabako@ug.nationmedia.com