Ugandan Private Sector Maintains Robust Growth for Seventh Month, Stanbic Bank PMI Shows
The upturn was primarily attributed by panelists to stronger demand and a continued surge in new orders, which also rose for a seventh month running. Firms credited successful advertising and marketing campaigns for the increased sales.
Uganda’s private sector extended its period of robust expansion into August, marking the seventh consecutive month of growth, according to the latest Stanbic Bank Purchasing Managers’ Index (PMI). While registering a slight moderation from the previous month, the index remained firmly above the critical 50.0 threshold, signaling sustained positive business conditions across the economy.
The headline Stanbic Bank PMI, compiled by S&P Global, stood at 53.3 in August, a marginal decrease from 53.6 in July. Despite this minor dip, the figure maintained a consistent trend of improving private sector performance observed monthly since February.
Christopher Legilisho, Economist at Stanbic Bank, commented on the findings, stating, “The Stanbic Bank Uganda PMI showed ongoing strong economic conditions in the private sector in August.”
“Sustained new order and output growth imply business conditions were supportive across all sectors. Furthermore, quantities of inputs purchased increased, and inventories grew. Meanwhile, companies were still optimistic about future output.”
The upturn was primarily attributed by panelists to stronger demand and a continued surge in new orders, which also rose for a seventh month running. Firms credited successful advertising and marketing campaigns for the increased sales. Expansions in both output and new orders were broadly recorded across all surveyed sectors, including agriculture, mining, manufacturing, construction, wholesale, retail, and services.
This positive sentiment translated into increased operational activity. Companies boosted input buying and made efforts to build up safety stocks to support the processing of new orders.
As a result, job creation remained robust in August, with the exception of the manufacturing sector where staffing numbers held steady.
Greater capacity provided by this employment growth helped firms manage their workloads, leading to a depletion of backlogs for the seventh time in the last eight months. Vendor performance remained largely unchanged during the month.
However, the period of growth was accompanied by persistent inflationary pressures. Legilisho highlighted this, noting, “Inflationary pressures remained amid increases in total input prices, purchase costs and staff costs, with August headline CPI unchanged from July.”
These rising input costs compelled companies to pass on a portion of the burden to consumers through another round of increases in selling prices, a trend supported by favourable demand conditions. While the agriculture and construction sectors reportedly saw decreases in total input prices, the rise in output charges was broad-based across segments.
Looking ahead, Ugandan companies remain optimistic about future business activity. Output expectations for the coming year stayed positive, with confidence reportedly bolstered by planned investments in advertising and client outreach initiatives.
