KAMPALA, April 4 (Xinhua) -- Uganda's Purchasing Managers' Index (PMI) declined in March for the second consecutive month due to rising cost of production and a decline in agricultural productivity due to dry weather conditions.
The PMI, which was conducted by Stanbic Bank, Uganda's largest bank, and released on Wednesday, showed that the Index fell to 51.7 in March from 54.4 in February. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.
"The decline in the PMI, similar to last month, is mainly due to weaker agricultural productivity owing to the dry weather conditions. That said, delayed payments from both the public and private sectors continue to hold back domestic demand. In any case, activity should start to pick up as the long rains potentially come through in April," said Jibran Qureishi, Stanbic Bank's regional economist for East Africa.
Although the PMI fell, Stanbic surveyors said the reading still points to improvement in business activity, which continued to rise at the end of the first quarter of the year in response to greater customer demand.
The survey, sponsored by Stanbic Bank and produced by the global information provider IHS Markit, has been conducted since June 2016 and covers the sectors of agriculture, industry, construction, wholesale and retail, and service.
Despite the decline in the PMI, the survey showed strong growth in construction, industry, service, wholesale and retail sectors. Only agriculture saw a drop in activity during the month.