Uganda’s private sector remained in expansion territory in January, marking 12 consecutive months of growth, according to the latest Purchasing Managers’ Index (PMI).
The Stanbic Bank Uganda PMI eased to 52.6 in January, down from 54.0 in December, but stayed above the 50-point threshold that separates expansion from contraction.
📊 What the PMI Shows
The PMI, compiled by S&P Global, highlighted:
Continued growth in new orders and business activity
Expansion across all five monitored sectors
The 12th straight month of job creation
Rising optimism about the year ahead
However, some firms reported disruptions linked to the election period, which slowed certain operations.
👥 Employment & Sector Trends
Companies hired additional staff for the 12th consecutive month
Many new hires were permanent
Agriculture was the only sector to record a drop in staffing
Increased hiring pushed up wage costs, with staff cost inflation resuming after a brief decline in December.
📦 Supply Chains & Costs
Businesses ramped up:
Input purchases
Inventory levels
This suggests firms are preparing for stronger output in coming months.
However:
Supplier delivery times lengthened for the third consecutive month
Delays were partly attributed to election-related disruptions
Input costs rose due to higher purchase prices, wages, and utilities
Despite rising costs, 97% of firms reported no change in input or output prices since December — indicating limited pass-through to consumers so far.
🔮 Business Confidence Remains Strong
Around three-quarters of surveyed firms expressed optimism about the year ahead, expecting:
Improved customer demand
Post-election economic normalization
Sustained recovery momentum
🏦 Why This Matters
The PMI reading suggests that Uganda’s private sector — a key driver of economic activity — is maintaining resilience despite temporary election-related headwinds.
Sustained expansion over a full year indicates:
Strengthening domestic demand
Stable macroeconomic conditions
Gradual business recovery
If the post-election period stabilizes quickly, growth momentum could accelerate further in early 2026.
