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Lacklustre construction sector slows Uganda private sector activity - PMI
Construction workers move building material on the site of a new hospital in Hoima town, Uganda, April 27, 2015. PHOTO BY REUTERS/James Akena
By Elias and Biryabarema
04/10/2017
KAMPALA (Reuters) - Private sector economic activity in Uganda expanded at a slower pace for a second consecutive month in September, held back by a weak construction sector, a survey showed on Wednesday.
The Markit Stanbic Bank Uganda Purchasing Managers' Index (PMI) slipped to 53.8 from 54.1 in August. A reading above 50 indicates activity is expanding, while below that shows a
contraction.
"Construction output decreased and the sector saw no change in new orders," said the survey report.
The East African economy, which is gearing up to start producing crude oil in 2020, is projected by the central bank to expand 5 to 5.5 percent in the fiscal year 2017/18, a rate the bank says is below its potential.
In August the PMI also declined, which was attributed to sagging activity in the export sector on account of political instability in important export markets.
One of these, South Sudan, has been embroiled in civil war for nearly four years.
The survey report said anecdotal evidence suggested an improvement in "underlying demand and inflows of new clients" in September.
Jibran Qureishi, Stanbic Bank's economist for east Africa, said pests like fall armyworm infestation posed a threat to food production and could drive up prices for the remainder of 2017.
"That said, a gradual improvement in private sector credit growth should bode well for domestic demand," he said.
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