Africa-Press – Uganda. Businesses have indicated a further improvement in business conditions during June, as output and new orders continued to expand, supporting growth in employment, purchasing, and stocks.
A report by Stanbic Bank indicates that companies benefited from quicker delivery times for inputs and were able to reduce their backlogs again, while at the same time, they increased staff hires.
The Purchasing Managers Index, which measures the overall business environment, however, slightly declined to 55.6 in June, 56.4 in May, but remained above the 50 mark, above which the business environment is measured as progressive.
The report indicates that businesses noted that demand conditions remained favourable, with new client wins also helping drive the upturn.
Subsequently, companies raised their output levels during June, with business activity increasing for the fifth consecutive month, amid strong client demand across all measured sectors of the economy. A higher purchasing managers index shows expansionary business activity and higher economic growth.
Mr Christopher Legilisho, a Stanbic Bank economist, noted that the index recorded an overall expansion for a fifth straight month in June due to robust economic conditions in the private sector, with both output and new order growth still healthy.
“Employment also expanded in June due to positive business growth foreseen over the coming months. This was further reflected by increases in purchasing as well as higher inventories. We therefore infer that GDP growth will prove strong in 2025 due to positive aggregate demand across most sectors,” he said.
However, he noted that input prices, purchase costs, and staffing costs rose again, but output charges were broadly unchanged.
Encouragingly, the long-term trends imply subdued inflation because of appropriate monetary conditions, an appreciating shilling, and deflation in energy prices.
Inflation remained low at 3.9 percent in June compared to 3.8 percent in May.
During June, the survey indicates, purchasing among private sector firms increased as has been the case in over two-and-a-half years, boosted by input buying, which rose in response to greater new order inflows.
Suppliers’ delivery times shortened for the first time in three months due to a fall in transportation-related issues, while stocks of purchases and pre-production inventories increased for the fourth consecutive month as firms sought to build safety stocks amid anticipated expansions in new orders in the coming months.
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