Stanbic launches Purchasing Managers’ Index
April 26—Uganda has strengthened its statistical base for devising economic indicators about business conditions with the launch of the Stanbic Bank Purchasing Managers’ Index (PMI) in conjunction with IHS Markit, one of the world’s leading financial information services providers.
The index is premised on the providing the earliest, most accurate and most comprehensive suite of economic indicators in the country,” Patrick Mweheire, the Stanbic Chief Executive said.
“It will allow policy-maker and businesses to make well informed decisions. Equally, the key indicators will provide a solid basis for investment strategies and asset allocation.”
The Stanbic PMI is a composite index, calculated as a weighted average of five individual sub-components: New Orders (30%), Output (25%), Employment (20%), Suppliers Deliver Times (15% and Stocks of Purchases (10%). readings above 50.0 signal an improvement in business conditions on the previous months while readings below 50.0 indicate a deterioration.
IHS Markit has more than 50,000 key business and government customers, including 85% of the Fortune Global 500 and the world’s leading financial institutions.
PMI will be released by Stanbic Bank on the third working day of each month will be available on the bank’s website http://www.stanbicbank.co.ug on the day of the official presentation. Next one is scheduled for May 4th.
Presenting the inaugural PMI report for March 2017, Anne Juuko, Stanbic Bank’s Head of Global Markets said the latest figures show Uganda’s private sector is recovering from the effects of the last election cycle and the global economic slowdown.
At 53.5 in March up from 50.9 in February, the seasonally adjusted PMI points to further improvement in business conditions for Uganda’s private sector firms.
However the average Headline PMI reading for the opening quarter as a whole (50.7%) was below that for the previous quarter (53.1).
The Headline index has now signaled expansion in nine out of the 10 months of data collection, showing improved operating performances for agriculture, industry, services and wholesale and retail sectors during March.
Mweheire said, “Ugandan companies stand to benefit tremendously from the survey, because the information compiled is current and has been gathered firsthand by a team of experts working in partnership with 400 of the country’s leading companies.”
Dr. Chris Mukiza, the Uganda Bureau of Statistics (UBOS) Director for Macroeconomics Statistics said, “I am pleased to confirm that the information has been collected diligently and to UBOS standards.”
He said, “We encourage such initiatives because they supplement the work being done by Government agencies and policy-makers to get a real-time understanding of how the private sector is performing. This will help us to put in place the interventions necessary to stimulate private sector-driven growth which is a national priority.”
Looking at the employment figures, Juuko said with new orders increasing, further job creation was registered in March. Staffing levels rose in agriculture, services and wholesale/retail sectors. On the other hand, there was lower employment in the industrial sector.
Juuko said the reason behind this, was the higher overall employment levels indirectly led to an increase in staff costs with the larger workforce being the primary reason behind depletion of outstanding business in March.
On the prices front, overall costs continued to increase during March. Apart from rising wages, cost increases reflected higher purchase prices, a by-product of rising input buying activity by Ugandan companies.
Kenneth Egesa, the Director of Statistics at Bank of Uganda, applauded this latest Stanbic initiative. “We live in a highly dynamic world where the quest for timely economic indicators seems insatiable. By providing additional timely and reliable indicators, both business executives and policy-makers are able to make more relevant decisions that positively impact their organizations and the entire economy.”
He said, “PMIs by their nature, provide price expectations to the various market players which is an important consideration for the central bank as it pursues price stability especially under a forward looking framework. We applaud you for taking on this important task and look forward to using this information in our policy analysis.”