Overview:
Firms attributed the expansion to new client wins and strong client demand conditions, with many reporting increased output and employment to meet growing demand.
KAMPALA, UGANDA – The Ugandan private sector has reported a fourth consecutive month of growth in new orders, marking a strong start to the third quarter.
The Stanbic Purchasing Managers’ Index (PMI), which tracks operating conditions in the private sector, rebounded to 53.7 in July from 51.9 in June.
The upturn was seen across all five monitored sectors, including agriculture, mining, manufacturing, construction, and services. Firms attributed the expansion to new client wins and strong client demand conditions, with many reporting increased output and employment to meet growing demand.
“The July PMI revealed a robust private sector economy performance,” said Christopher Legilisho, Economist at Stanbic Bank. “Firms have increased employment, input buying, and stocks of raw materials to support increased workloads from higher output and new customer orders.”
The survey also showed optimism among firms about the outlook for output over the coming year, with companies raising their workforce numbers and increasing input buying to stockpile materials. However, input prices rose again due to hikes in staff and purchase costs, leading to higher selling prices.
Despite cost pressures, firms remain confident about the future, with many expecting continued growth in output and new orders. The Stanbic PMI is compiled by S&P Global from responses to monthly questionnaires sent to purchasing managers. A reading above 50.0 indicates a generally positive outlook.
The continued growth in new orders and output is a positive sign for the Ugandan economy, indicating a strong and resilient private sector. However, the rise in input prices and costs may pose a challenge to firms in the coming months.