Uganda’s private sector continued its upward trajectory in April, with the headline Stanbic Purchasing Managers’ Index (PMI) rising to 55.3 from 52.9 in March, pointing to improving business conditions for the third consecutive month. A reading above 50.0 indicates growth, while a reading below signals contraction.
The April surge was driven by robust expansions in business activity and new orders, buoyed by strong customer demand and successful marketing campaigns across sectors.
“April data for the Stanbic PMI was strong, implying a vibrant private sector that remains optimistic about current and future consumer demand,” said Christopher Legilisho, Economist at Stanbic Bank Uganda.
He noted that businesses saw growth in both output and new business across all sectors, including agriculture, manufacturing, construction, wholesale, retail, and services. Increased consumer purchasing power and acquisition of new clients contributed significantly to the improved performance.
Firms responded to rising demand by boosting employment, purchasing inputs, and building inventories. As a result, backlogs of work were cleared for the fourth straight month, while hiring increased for the third month in a row.
However, the upbeat performance came with higher operational costs. Input prices rose due to elevated utility bills, increased material prices, and higher staffing costs tied to expanded workforce requirements. Firms passed on these costs to customers through increased output charges.
“The rise in both input and output prices was influenced by hikes in purchase prices and staffing costs, which were necessary to support growing workloads,” Legilisho explained.
April also marked the return of supplier delays, with delivery times lengthening for the first time in 17 months—a sign of renewed pressure on supplier capacity due to increased demand.
The PMI survey, compiled by S&P Global, is based on responses from 400 purchasing managers across key sectors. The index itself is a weighted average of five indicators: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%).
Looking ahead, business sentiment remains strongly positive. Many firms anticipate continued growth in activity over the next 12 months, driven by expectations of higher client demand and further investment in marketing and advertising.
The April figures suggest a resilient and expanding private sector in Uganda, underpinned by broad-based growth and a cautiously optimistic outlook despite rising operational costs.