Uganda’s private sector ends 2024 on a high

Uganda’s private sector has ended 2024 on a high, with sustained growth in output and new orders, according to the latest Stanbic Purchasing Managers’ Index (PMI).

The PMI, which provides a measure of prevailing private sector outlook, dropped to 53.1 in December, down from 55.7 in November.

However, readings above 50.0 signal an improvement in business conditions on the previous month.”

December’s PMI data reveals sustained strong private sector growth, with businesses budding in optimism about present and future economic conditions,” said Christopher Legilisho, Economist at Stanbic Bank.

The expansion in output and new orders was driven by strong sustained customer demand, with companies reporting an increase in new orders across the board.

This led to an expansion in output, with business activity increasing across each of the five broad sectors covered by the survey.

However, despite the growth in output and new orders, companies scaled back employment for the second month running.

The fall in staffing levels often reflected the non-replacement of leavers.

Input and output price pressures remained, due to elevated utility bills and increased purchase prices. However, staff costs were broadly stable.

“The uptick in new order growth occurred across the board, reflecting the acquisition of new clients and an improvement in consumer purchasing power,” said Legilisho.

The PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers of around 400 local private sector companies.

The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail, and services.

The survey found that hopes are high that customer numbers will rise further over the course of 2025, contributing to confidence in the year-ahead outlook for business activity.