Businesses register increase in new orders, employment 

Friday May 07 2021
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Mr Ronald Muyanja, the Stanbic head of trading

By MARTIN LUTHER OKETCH

Businesses across five measured sectors, among them agriculture, construction, industry, services, wholesale and retail registered an increase in new orders and output in April, signaling a steady recovery of the economy from the low performances of January and February.   

The increase in new orders and output, according to the Stanbic Purchasing Managers Index, was achieved as a result of resilience and stable improvement with the economy starting to shake off Covid-19 related disruptions.

During the period, Purchasing Managers Index, which measures performance of the economy, rose to 57.8 in April from 53.2 in March 2021, the highest in over months. 

The Purchasing Managers Index, which surveys business activities and interviews top chief executive officers and procurement managers, measure monthly performance of the economy.

The 57.8 rate was, according to Stanbic, above the 53 monthly average since the survey was launched in 2019.

The survey, which was released early this week, noted that the private sector continued to recover in April with business conditions, employment and purchasing orders consistently improving since February.

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This, the survey noted, saw the volume of new orders increase, feeding from a rise in stock of company inputs.

The survey also noted a rise in employment for the third month since January and an increase in prices of some goods resulting from an increase in the price of inputs and raw materials.

During the period, researchers indicated marked optimism with at least 85 per cent of interviewed managers predicting a continued increase in new orders and to a larger extent an improvement in the economy. 

 However, during the period, exports and new business from abroad fell due to the impact of Covid-19.

Mr Ronald Muyanja, the Stanbic head of trading, said the increase in new orders and output extended the current sequence of expansion and growth at the start of the second quarter, which points to the stability in the economy.

Employment levels, he said, rose for the third consecutive month across agriculture, construction, industry, services, wholesale and retail due to growth in customer demand, forcing companies to take on additional workers.

 This as a result led to an increment in staff costs while wages and salaries rose following a fall in March.

Sufficient capacity

During April, according to Mr Muyanja, work backlog decreased, creating sufficient capacity for businesses to handle new business.

 The survey also noted an increase in inflation to 11 months resulting from an increase in prices of raw materials such as cement, paper and stationery, growing staff costs, electricity and fuel charges. 

 Suppliers’ delivery times reduced with respondents indicating that prompt payments had helped to fasten deliveries, while others reported that vendors had made efforts to shorten lead times in order to deal with greater order volumes.

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