Report; Private Sector Businesses Record Fifth Straight Month of Growth Amid Strong Demand and Business Confidence

Uganda’s private sector continued its upward trajectory in June, marking the fifth consecutive month of business improvement, according to the latest Stanbic Purchasing Managers’ Index (PMI) report. Despite a slight dip in the overall index, key indicators—including output, new orders, and employment—remained firmly in expansion territory.

The June PMI, compiled by S&P Global, posted a score of 55.6, down marginally from 56.4 in May. However, any reading above 50.0 signals overall growth in the business environment, and the latest results confirm sustained economic resilience within the private sector.

According to Christopher Legilisho, Economist at Stanbic Bank, the steady growth reflects “robust economic conditions in the private sector, with both output and new order growth still healthy.” He added that hiring remained strong in June as businesses expanded their workforce in anticipation of continued growth, leading to increased purchasing activity and inventory accumulation.

“The outlook is bright,” Legilisho remarked. “We anticipate strong GDP growth in 2025, driven by solid aggregate demand across most sectors of the economy.”

The PMI report highlights that new business inflows continued to climb at the close of the second quarter, as firms benefited from favourable market conditions and new client wins. This rise in demand prompted a broad-based increase in output, with notable growth seen across multiple industries.

Despite rising input costs—fueled by higher wages, fuel prices, and material expenses—most firms chose to keep output charges stable in June. While some attempted to pass on higher costs to consumers, many businesses opted for discounting strategies to remain competitive. Only the agriculture and wholesale & retail trade sectors reported increases in selling prices.

Delivery times for inputs improved, enabling businesses to reduce backlogs and improve efficiency. In fact, incomplete work dropped for the sixth consecutive month, reflecting stronger operational capacity and smoother supply chains.

Employment also saw positive momentum, with companies adding both temporary and permanent workers to accommodate higher order volumes. Increased staffing levels helped businesses maintain service delivery and clear outstanding work more effectively.

June also saw a notable rise in input purchasing and stockpiling, as firms sought to meet current demand and prepare for future growth. Construction companies stood out by reporting a decline in input and overall cost burdens, contrasting with the general trend of rising expenses in other sectors.

Looking ahead, Ugandan businesses remain broadly optimistic. The PMI survey noted that firms are investing in advertising and market outreach, with many expressing confidence in continued business growth over the next year. This positive sentiment underlines a business climate that is not only recovering but building momentum across multiple fronts.

The June PMI report paints a picture of a resilient and forward-looking private sector, buoyed by strong demand, improved operational efficiencies, and strategic planning—all pointing to a solid foundation for sustained economic growth in the months ahead.

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