The private sector continued its upward trajectory in August, marking seven consecutive months of expansion, according to the latest Stanbic Bank Purchasing Managers’ Index (PMI).
The headline PMI registered at 53.3, slightly down from 53.6 in July, but still signalling robust growth as it remained above the 50.0 threshold that indicates improving business conditions.
The PMI, compiled by S&P Global for Stanbic Bank Uganda, draws from responses by purchasing managers across sectors including agriculture, mining, manufacturing, construction, wholesale, retail, and services. The index is a weighted average of five key indicators: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%).
The sustained growth in August was driven by stronger demand, leading to increases in new orders, output, employment, and inventories.
Businesses reported a seventh consecutive month of rising new sales, attributed to effective advertising and marketing campaigns. All sectors recorded expansions in both output and new orders, reflecting broad-based growth.
Christopher Legilisho, an economist at the bank said “sustained new order and output growth imply business conditions were supportive across all sectors. Furthermore, quantities of inputs purchased increased, and inventories grew.”
According to the PMI, employment rose across most sectors, with the exception of manufacturing, where staffing levels remained unchanged. Firms also increased input purchases to build safety stocks, enabling them to manage workloads effectively and reduce backlogs for the seventh time in eight months.
However, inflationary pressures persisted, with rises in purchase costs, staff costs, and overall input prices. Despite declines in input prices in agriculture and construction, firms across all sectors raised selling prices to offset these costs, supported by favourable demand conditions.
Looking ahead, the PMI shows Ugandan companies remain confident about future growth, with positive output expectations driven by planned investments in advertising and client outreach.
“Companies were still optimistic about future output,” Legilisho said highlighting the upbeat projections for business activity over the next year.
