What you need to know:
- Overall, economic performance slightly declined from a score of 54.6 in October to 54.1.
- During the period, the survey reported strengthening of the private sector due to strong recovery witnessed in the last four months.
There was a rebound in demand for employees as companies responded to sustained increases in output and new orders, according to the Stanbic Bank Purchasing Managers’ Index.
The survey, which measures monthly performance of the economy, noted a return in employee demand in the private sector for the first time in six months.
This, Stanbic noted, partly signals a rebound in the employment segment that has largely been unstable for almost two years.
According to the survey, during November, respondents indicated an increase in workforce numbers due to growth in new orders but also noted growth in staff costs.
However, the survey indicated a reduction in employment in agriculture, the only sector to register a drop.
During the period, the survey noted, input costs continued to surge, forcing an increase in selling and product prices.
Input prices have been increasing for the fourth successive month with close to 27 percent of participating companies signaling a move towards increase in product prices.
According to data from Uganda Bureau of Statistics, product prices, especially for food and fuel increased in November by an average of 2.6 percent.
Most companies, the survey indicates, mentioned surging cost of fuel as the most immediate concern.
Overall, economic performance slightly declined from a score of 54.6 in October to 54.1.
During the period, the survey reported strengthening of the private sector due to strong recovery witnessed in the last four months.
Mr Ferishka Bharuth, the Stanbic Bank economist - Africa Regions, said that although the score had reduced, it pointed to an improvement in business conditions that have remained expansionary for the past four months.
“With economic conditions recovering, companies are emboldened to adjust selling prices upwards for the third month, as their input costs have been rising,” he said, noting that notwithstanding the uncertainty due to new Covid-19 threats, companies had remained optimistic that business activity will increase further over the next year.
In line with the headline figure, both output and new orders increased for the fourth month running in November.
Mr Ronald Muyanja, the Stanbic Bank head of trading, said the health of the private sector had strengthened in each of the past four months, noting that anecdotal evidence pointed to stronger demand and higher customer numbers among all the five monitored sectors.
However, the survey noted, demand is expected to be affected by increasing product prices, among which include cement, cooking oil, soap and sugar.
During the period, stock purchases rose for the second month as companies responded to improving demand conditions.
More than 26 percent of respondents reported an increase in inventories, against 11 percent that posted a decrease.
Increase in the cost of transport
The survey is conducted through interviews that are conducted among company executives or purchasing and procurement managers.
Suppliers’ delivery time, according to the survey, shortened during November with respondents indicating prompt delivery of orders.
However, the survey reported an increase in transportation costs but noted they were optimistic that business activity will continue to grow over the coming year, supported by expectations of further improvements in new orders and customer numbers.