Optimism remains high on resilient demand

June 8, 2019 in Companies, Financial Services, Markets by Editor

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The Stanbic Purchasing Managers Index (PMI) for May rose to 57.3, up from 54.7 in April on the back of a sustained increase in output across agriculture, industry, construction, wholesale and retail services.

Purchasing managers reported robust customer demand with firms optimistic that output would increase further over the coming year, amid business expansion plans, investment and advertising.

“Private sector activity remains solid. Despite higher input costs, the rise in new orders has supported overall output. Of course, once poor weather conditions are behind us, agricultural output could somewhat recover in the second half of the year. This also may coincide with a rise in investment mainly in the energy sector which will indeed support growth in the private sector,” said Jibran Qureishi, Stanbic’s Regional Economist for East Africa.

Companies hired more to keep pace with order growth with some indicating that they had raised staffing levels to make sure that projects were completed on time.

“Benoni Okwenje, Stanbic Uganda’s Fixed Income Manager said overall input costs rose during May.

“Higher purchase prices and staff costs were recorded, but we also noted increases in bills for electricity and water, and rising internet rates. Where purchase costs increased, there were higher prices for materials including cement, computer equipment, maize, paper and stationery.

However, from a Consumer Price Index (CPI) perspective, short to medium-term conditions are expected to remain positive with Inflation confined within the 3.0pc – 5.0pc range,” he said.