The private sector in Uganda has posted improved performance this year, an indication that it is slowly recovering from the effects of Covid-19
This is contained in the Ministry of Finance Performance of the Economy report for April 2021.
The Purchasing Managers Index (PMI) survey conducted by the ministry indicated an improvement in economic activity of the private sector in March 2021. The index was registered at 53.2 in March 2021 up from 51.2 for February.
PMI is a survey-based indicator of business conditions, which includes individual measures (‘sub-indices’) of business output, new orders, employment, costs, selling prices, exports, purchasing activity, supplier performance, and backlogs of orders, among others.
This was attributed to rising new orders which implies improvement in aggregate demand, as well as increase in output by businesses as they gradually return to a more normal economic environment.
The improvement in economic activity during the month was registered in all sectors of the economy and resulted in improvement in employment levels, according to the report.
The Composite Index of Economic Activity (CIEA) was recorded at 154.5 in February 2021 up from the 154.1 registered in the previous month, indicating a slight upturn in economic activity following a slowdown caused by the uncertainties related to the January 2021general elections. The CIEA is used to anticipate the turning points of growth cycles or fluctuations in the economy’s growth rate.
According to the report, the Business Tendency Index (BTI) remained above the 50-mark threshold in March 2021, an indication of optimism about the business environment. The BTI is forward looking and the recording of 52.04 during the month indicates optimism regarding doing business in the next three months. The optimism is borne out of the continued recovery in economic conditions following the easing of restrictions related to Covid-19. The sectors where businesspeople and investors reported the most optimism included manufacturing, wholesale trade and agriculture.