Uganda: Stanbic Sees Growth in Business Purchases

Stanbic bank has witnessed growing confidence in the business community to invest more, two months after the market showed strong signs of uncertainty and pessimism.

According to the bank’s Purchasing Managers’ Index (PMI), “Private sector optimism picked up during February ending a two-month sequence of job cuts and leading to an improvement in the Stanbic Purchasing Managers’ Index (PMI) to 51.2 from 49.8 in January. The index is now above 50.0 signifying a positive outlook compared to the same period in January.”

In a statement, Stanbic says the end of the election season and the partial reopening of schools had spurred demand. Ronald Muyanja, the head of trading at Stanbic Bank Uganda, in statement, said “preparations for a wider reopening of schools is supporting a return to growth. This new business has led to a rise in output in February (the eighth in as many months) particularly in the agriculture and industry sectors. We however continue to see decline in activity elsewhere.”

“The downturn in business conditions that came with the election period has subsided and the health of the private sector has improved. New orders, staffing hires and output continued to rise in February. Business conditions have now strengthened in seven of the past eight months, even though the latest reading is still below the series average of 52.9.”

The PMI is a index that offers an outlook of the operating conditions in Uganda. Stanbic bank sponsors this monthly survey, which is produced by IHS Markit.

The survey covers the sectors of agriculture, industry, construction, wholesale & retail and service sectors. The statement also noted that there were more job hirings in the month of February.

“The return to growth seen last month has ended a two-month sequence of job cuts. And subsequently an increase in staffing levels means an increase in employee expenses, purchase costs of goods and services thus good business,” Muyanja said.

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