Uganda’s private sector optimism grows as PMI rises to 55.7 in November

Uganda’s private sector remains optimistic, with the latest Stanbic Purchasing Managers’ Index (PMI) rising to 55.7 in November, marking eight consecutive months above the 50-point threshold, which signals positive business conditions.

Christopher Legilisho, an economist at Stanbic Bank, highlighted the sector’s resilience, stating, “The PMI rose to 55.7, extending positive business conditions for an eighth consecutive month, driven by strong, sustained customer demand, leading to increased output and new orders, despite a decline in employment.”

The survey, conducted by S&P Global, covers key sectors such as agriculture, mining, manufacturing, construction, wholesale, retail, and services. All monitored sectors reported expansions in business activity and new orders, reflecting stronger demand conditions.

In response to rising demand, firms boosted input purchases, anticipating further client demand growth. However, employment levels declined across all surveyed sectors, as businesses sought to contain costs amid reduced work backlogs.

Legilisho noted an increase in input and output price pressures, attributing the rise to higher utility and energy bills, as well as elevated costs for construction materials, food, and toiletries.

Despite these challenges, businesses remain optimistic about the economic outlook, driven by planned investments and expectations of strong consumer demand in the coming year.

The data further revealed that Ugandan businesses raised their selling prices for the third consecutive month in November, except in the construction sector, where prices remained unchanged. Input buying continued to grow, supported by improvements in suppliers’ delivery times, enabling firms to build safety stocks in anticipation of further increases in new orders.

The PMI results reflect the private sector’s resilience and optimism amid a steadily improving economic environment.