KAMPALA, UGANDA — Ugandan businesses saw continued improvement in conditions in June, marking the fifth consecutive month of growth, according to the latest Stanbic Purchasing Managers’ Index (PMI). Despite a slight dip in the headline index, the private sector reported expansions in output, new business, and employment.
The Stanbic PMI, compiled by S&P Global, registered 55.6 in June, a decrease from 56.4 in May. However, a reading above 50.0 indicates improving business conditions.
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Christopher Legilisho, an economist at Stanbic Bank, attributed the sustained expansion to “robust economic conditions in the private sector, with both output and new order growth still healthy.” He added that employment also expanded due to “positive business growth foreseen over the coming months,” leading to increased purchasing and inventories.
Legilisho projected strong gross domestic product (GDP) growth for 2025, driven by “positive aggregate demand across most sectors.”
The June report indicated quicker delivery times for inputs, allowing businesses to reduce backlogs. While staff and purchase costs rose again, output charges remained largely unchanged.
Ugandan firms reported another rise in new business at the end of the second quarter, fueled by favorable demand and new client acquisitions. This prompted companies to increase output levels, with expansions seen across various sectors.
Despite the accommodating demand, most Ugandan firms kept output charges stable in June. Some attempted to pass on higher costs, but others offered discounts to remain competitive. Only the agriculture and wholesale and retail sectors saw an increase in selling prices.
Input costs continued their upward trend in June, driven by higher wage bills, fuel, and material prices. Construction firms were the exception, reporting a drop in purchase and overall cost burdens.
Businesses also increased employment in June, hiring both temporary and permanent staff due to higher new order intakes. Increased capacity allowed firms to effectively manage their backlogs, with incomplete work falling for the sixth consecutive month.
Shorter lead times for inputs and strong demand also spurred growth in input buying and stockpiling.
Ugandan businesses expressed broad optimism for the year ahead, attributing their confidence to investments in advertising and efforts to reach new customers.
