Growth in Uganda’s private sector slowed for a third consecutive month in October, attributed to a weak industrial backdrop as political tensions in a key trading partner Kenya limited new orders, a new survey shows.
The Markit Stanbic Bank Uganda Purchasing Managers’ Index (PMI) slipped to 52.8 from 53.8 in September. A reading above 50 indicates activity is expanding, while below that shows contraction.
According to the survey report, activity in the industry sub-sector declined due to the unpredictable political environment in key export destinations.
Jibran Qureishi, East African economist at Stanbic Bank, said ‘enhanced and prolonged political risks’ in Kenya had slowed its trading with Uganda.
Kenya, gripped by political tensions and sporadic violence since its August 8 presidential elections, is Uganda’s biggest trading partner and its gateway to the sea.
“As political risks subside in neighbouring Kenya over the coming months…growth in Uganda will probably continue to remain on an upward trajectory,” Qureishi said.
According to the survey, during October, business activity expanded in agriculture, services, construction, wholesale and retail.