Kampala — Uganda's private sector remains resilient with the Stanbic Purchasing Managers' Index (PMI) for November climbing to 55.7, up from 52.9 in October. This marks the eighth consecutive month of expansion, as readings above 50.0 signify positive business conditions.
Christopher Legilisho, Economist at Stanbic Bank, described the November results as a reflection of growing optimism about both current and future economic conditions.
"Strong customer demand fueled increases in output and new orders, even as employment dipped slightly," he said.
The PMI, compiled by S&P Global, is a weighted average of five key indicators: New Orders, Output, Employment, Suppliers' Delivery Times, and Stocks of Purchases. The survey spans multiple sectors, including agriculture, mining, manufacturing, construction, wholesale, retail, and services.
All five monitored sectors reported expansions in business activity and new orders during November. Firms responded to the surge in demand by increasing purchasing activity and building inventories. Greater output and improved supplier delivery times supported these efforts.
Despite the growth, businesses faced rising operational costs. Higher prices for construction materials, food, toiletries, and energy drove cost inflation, prompting companies to raise selling prices for the third consecutive month. Total input costs also rose due to higher purchase and staff expenses.
"Employment levels fell across all sectors in November, as firms focused on cost containment amid reduced backlogs of work," Legilisho explained. However, he emphasized that businesses remain optimistic about the future, citing planned investments and strong consumer demand expectations for the coming year.
Notably, businesses were able to deplete backlogs despite the uptick in new orders, reflecting efficiency improvements. Input buying also grew midway through the fourth quarter, supported by improved supplier delivery times.
While rising costs challenge profitability, the private sector's resilience is evident. Firms are preparing for future opportunities by building safety stocks and strengthening their operations.