Business recovery still slow but steady, says Stanbic
What you need to know:
- Employment. During September, the Index notes, there was a fall in staffing levels, which has been consistent in the last four months now. During the period, there was also a reduction in staff costs due to a fall in wages and salaries in agriculture, construction, industry, services and wholesale and retail.
Business sentiments in the private sector remained positive even as there was slow growth in new orders during September, according to the Stanbic Bank Purchasing Managers Index (PMI).
However, the index indicates that the slow growth in new orders was compensated with the increase in output, which signals a pickup in manufacturing and primary production.
During the period, according to the Index, business performance scored above the 50 benchmark, increasing to 52.5 compared to 50.2 in August.
However, the reading was slightly lower than the monthly average of 52.9 recorded since the survey was first launched in June 2016.
According to the survey, four out of the five broad surveyed sectors saw an increase in output, apart from wholesale and retail.
During the period new orders rose for the second successive month, largely due to easing of Covid-19 restrictions, which supported improvement in demand and higher customer numbers.
Mr Ronald Muyanja, the Stanbic trading, global markets head, said the private sector was able to build on the return to growth seen during August at the end of the third quarter, registering a second consecutive gain in output and new orders.
However, he noted, employment and purchasing activity continued to fall during due to a reduction in cash flow positions.
During the period, new orders increased for the second consecutive month amid easing of lockdown restrictions, resulting into higher customer numbers and improving demand.
Business activity also expanded in September, building on growth in August. However, during the period, international demand struggled again with new export orders decreasing for the 13 consecutive month.
However, overall, input prices increased for the second month, save for agriculture, which was the only sector to register a decline.
The Index also noted that together with higher purchase costs, respondents highlighted an increase in charges for utilities such as electricity, and range of items including cement, food products and stationery, report price increase.