KAMPALA, Uganda — Uganda’s private sector business confidence reached its highest level in almost two years in May, driven by strong customer demand and increased output. The headline Stanbic Bank Purchasing Managers’ Index (PMI) rose to 56.4 in May, up from 55.3 in April, well above the 50.0 threshold that indicates an overall improvement in business conditions.
Christopher Legilisho, an economist at Stanbic Bank, said the data reflected sustained momentum in the private sector.
“Robust new orders and output were attributed to increased sales and strong customer demand across all monitored sectors,” Legilisho said. “Ugandan firms increased staffing levels for a fourth month, both part-time and full-time, due to increased output.”
The Stanbic PMI, compiled by S&P Global, is based on responses from purchasing managers at approximately 400 local private sector companies across agriculture, mining, manufacturing, construction, wholesale, retail and services. The index is a weighted average of new orders, output, employment, suppliers’ delivery times and stocks of purchases.
Companies reported that stronger client demand drove expansions, leading firms to increase both staffing levels and input buying. Expectations of greater future output also encouraged businesses to accumulate stocks.
Firms increased selling prices again in May, responding to strong demand conditions and higher purchase and staff costs. Legilisho noted that rising operating expenses and increased costs for goods such as cement, soap and food contributed to a “moderate build-up in inflationary pressures.”
Despite these cost increases, firms remained optimistic about future business conditions, anticipating continued growth in customer demand and output over the next 12 months.
Ugandan firms also expanded their purchasing activity and increased inventory levels in response to strong demand. Employment growth across all five monitored sectors enabled companies to reduce outstanding work for the fifth consecutive month.
