Business conditions in Uganda’s private sector improved sharply in May,t reaching their highest level in nearly two years, driven by strong customer demand, rising output, and renewed job creation, according to the latest Stanbic Bank Uganda Purchasing Managers’ Index (PMI).
The headline PMI rose to 56.4 in May, up from 55.3 in April, marking the fourth consecutive month of improvement and the strongest performance since mid-2023. A score above 50.0 indicates expansion in the private sector.
“Stanbic Bank Uganda PMI data for May was still stronger, expanding to the highest level in 23 months, implying sustained private sector momentum,” said Christopher Legilisho, an economist at Stanbic Bank.
He attributed the gains to robust customer demand, with firms reporting increased new orders and output across all monitored sectors, including agriculture, manufacturing, construction, wholesale, retail, and services.
The report highlights a surge in both part-time and full-time hiring, marking the fourth straight month of employment growth. Firms said new hires were necessary to meet growing output demands and improve service delivery.
“Ugandan firms increased staffing levels for a fourth month… Staffing costs ticked up as some companies paid bonuses to motivate workers,” Legilisho added.
Improved staffing helped firms reduce outstanding work, while expectations of continued demand supported higher inventory levels and purchasing activity.
Despite the positive momentum, businesses continued to face rising input costs, particularly for cement, soap, food, and fuel, leading to increased selling prices, especially in the agriculture and services sectors.
“Firms raised output prices in response to strong demand conditions… pointing to a moderate build-up in inflationary pressures,” Legilisho noted.
The report also recorded a slight decline in supplier performance, but this did not stop firms from boosting their input buying and stock levels in anticipation of future business growth.
The PMI report, compiled by S&P Global from a survey of 400 purchasing managers, shows sustained optimism in Uganda’s private sector, with firms confident about rising business activity over the next 12 months. Many cited planned investments in advertising and growing customer bases as key factors for their positive outlook.
The data reinforces the view that Uganda’s private sector is on a strong recovery path, driven by broad-based sector growth and supportive demand conditions.
