Stanbic Bank will effective this month be releasing a monthly survey indicating the business environment in Uganda’s private sector. The Private Managers’ Index which will be sourced in partnership with Markit, search one of the world’s leading financial information service providers.
The index will provide an early and accurate indication of business trends in the country basing on five components; orders, side effects output, ailment employment, suppliers’ delivery times and stocks of purchases. Business output will contribute 25%, orders 20%, employment (20%), suppliers’ delivery times (15%) and stocks of purchaces (10%).
Stanbic Bank says it will be partnering with 400 leading private companies in Uganda from which information will be sourced, representative of the entire sector.
From the data collected, readings that will go above 50.0 will signify an improvement in business conditions on the previous month whereas readings below 50.0 will signal deterioration.
Patrick Mweheire while launching the new indicator at Sheraton Hotel Kampala on Wednesday said it will go a long way in improving the access and quality of data which remains scanty in Uganda.
“The index is premised on providing the earliest most accurate and comprehensive suite of economic indicators in the the country. It will allow policy makers and businesses to make well informed decisions,” Mweheire said.
In addition, he noted that investors will use the index as a yardstick before making investment strategies and asset allocation.
Previously, it has been difficult to gage the economic sentiment within private businesses with almost individual businesses giving different analyses. Such uncoordinated views could result into policies that do not reflect the realities within the business sector as well as misguided economic forecasts.
Mweheire added; “Ugandan companies will benefit tremendously from the survey because the information is current and has been gathered first hand by a team of experts.”
Basing on its initial issue (March 2017) of the Private Managers’ Index, with data collected since June 2016, Stanbic Bank reported that Uganda’s private sector is recovering from the country ffexts of the last election cycle and the global economic slowdown. The March index points to a 2.4 increase in readings from 50.9 in February.
The average headline Index reading for the opening quarter as a whole was below compared to 53.1 in the prior quarter. Improved operating performance was signaled for the agriculture, industry, services, wholesale and retail sectors in the month of March.
In regard to employment, the March index figures indicate an increase in job creation as a result of a rise in new orders. Staffing levels went up in the sectors of; agriculture, services, wholesale and retail while the least employment was registered in industry.
Kenneth Egesa, the Director of Statistics at Bank of Uganda lauded Stanbic Bank for the initiative saying that the index will influence policy making and business decisions.
“In this highly dynamic world, the quest of timely economic indicators is insatiable. However, I propose that confidentiality of respondents be maintained if the if index is to get genuine data,” Egesa said.
Asked about the general outlook of Uganda’s economy in the short term, Mweheire predicts a recovery in the economy especially driven by the easing in Central Bank’s monetary policy which he says will drive some investment. He also said that the developments in the oil sector are positive.