Africa-Press – Uganda. A steady growth in demand for goods and services supported an improvement in business activity during the quarter ended March, according to a survey by Stanbic Bank.
The monthly survey measures performance of the economy based on demand and returns from purchasing managers and chief executive officer.
During March, the survey noted, the score for Purchase Managers’ Index, which is compiled through conducting interviews with company purchasing managers and chief executive officers, rose to 53.2 from 51.2, which for the first time in more than a year, was above the 52.4 average score.
The score has been improving in the last five months with the February Ministry of Finance Performance of the Economy report, saying the economy had continued to recover due to a reduction in inflationary pressures.
The survey reported improvements in both output and new orders, which increased for the eighth month.
However, the survey indicated that companies had reported a drop in employment, for the second month even as business activity had risen across measured sectors, among which include agriculture, construction, industry, services and wholesale & retail sectors.
Growth in demand was also supported by a reduction in commodity prices for the first time in over a year.
Ms Mulalo Madula, an economist at Standard Bank, said for the eighth month output had grown due to strong domestic demand supported by competitive pricing, which resulted in an increase in purchasing activity.
She also said that while increased workloads had encouraged some firms to rise employment, “overall employment declined as workers resigned to seek opportunities elsewhere”.
The Purchase Managers Index measures performance of the economy by placing a mid-level score of 50, below which implies a weakening business environment, while a score of above 50 portends business stability or growth.
During the period, Ms Madula said, despite some pressure on capacity as a result of increase in new business, backlogs of work continued to fall at the end of the first quarter for the fifth month in a row.
However, suppliers’ delivery time lengthened for the second month, with delays linked to higher costs and heavy rains causing transportation problems.
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