What you need to know:
Since November, companies have seen growth in new orders thus forcing companies to hire additional staff to meet demand.
Staffing levels improved for the third month since November as companies responded to substantial growth in workloads and demand, according to the Stanbic monthly Purchase Managers Index.
The Index, which measures the monthly performance of the economy, noted that companies were forced to increase staff levels to counter rising demand for a number of goods and services, coming on the back of full reopening of the economy in January.
On January 24, government fully reopened the economy, allowing a number of sectors such as entertainment, transport, bars and entrainment centres, restaurants and eateries to fully operate for the first time in over two years.
While presenting findings of the Purchase Managers Index, which gathers economic performance data through interviewing company executives and procurement managers, Mr Ferishka Bharuth, the Stanbic Africa region economist, said at the weekend employment was high for the third month in a row supported by the need to increase output to supply new orders and build sufficient stock.
Interviewed managers, he said, remained optimistic for further improvements in all sectors of the economy but pointed out the threat of inflation, occasioned by an increase in a number of commodity prices.
“The Index has been expanding - above 50 average - since August 2021. Within the Index output, new orders, employment and purchasing activity were all higher and companies are optimistic of further improvement,” Mr Bharuth said but warned that inflationary pressures have manifested in output charges that have been increasing in the last sixth months.
Increase in output prices and disruptions at the global level, worsened by the conflict between Russia and Ukraine, has in the last two months pushed up commodity prices of a number of goods such as cement, food products, fuel, soap and stationery.
This Index, which has been measuring the performance of the economy since June 2016, during February found that all sectors of the economy, apart from construction, had registered significant recovery in terms of output, demand and employment.
For instance, the Index noted, agriculture, industry wholesale and retail and service sectors all registered improvements.
During February, the survey indicated, the Purchase Managers Index rose to 55.7 in February up from 54.9 in January due to sustained recovery in private sector performance for the seven months to February.
The reopening of the economy, Stanbic noted, has allowed companies to secure and obtain greater volumes of new orders as well as expanding business opportunities during February.
Return to normality
According to the Stanbic Purchase Managers Index, the return to normality has further improved the business environment, boosting purchasing activity and economic projections.
However, the environment remains fragile due to increase in prices of important services and commodities, among them fuel, electricity and transportation.
Mr Ronald Muyanja, the Stanbic head of trading, says, however, there is widespread optimism that output will increase over the coming year, largely reflecting confidence in the future path of new orders.
More than 86 percent of respondents predicted a rise in activity.