The private sector in Uganda experienced a positive end to the year 2023, marked by increased demand for goods and services in the month of December. Both the Uganda Bureau of Statistics and the Stanbic Purchasing Managers Index (PMI) reported a surge in business activity and new orders during this period.
The headline monthly PMI rose to 54.8 in December, up from 53.4 in November, marking the highest reading since June 2023. This continuous growth for the fourteenth consecutive month reflects a positive investor perspective on business performance, as any reading above 50.0 indicates improvement.
Compiled by S&P Global, the PMI gathers insights from purchasing managers in sectors such as agriculture, mining, manufacturing, construction, wholesale, retail, and services. The increased demand in December led to higher new orders and business activity, prompting companies to expand employment for the ninth consecutive month, both on a permanent and temporary basis.
While the agriculture sector faced backlogs, leading to increased hiring, the industry sector experienced some reduction in employment. Overall, companies expanded employment and purchasing activities. Despite this, the survey noted a rise in backlogs of work in December, the first occurrence since the survey’s initiation.
Higher demand also led to a rise in input costs and selling prices. Input costs increased due to higher expenses for purchases, staff, and utility bills, including electricity and water. Consumer prices saw major increases in fuel, rice, motorcycles, and transport, compared to November.
All five broad sectors posted an increase in output for the first time in three months, with the wholesale and retail category returning to growth. Companies expressed optimism about the 12-month outlook for business activity, driven by expectations of further increases in customer numbers throughout 2024.
Approximately 83% of respondents predicted an expansion in output, while less than 1% were pessimistic. This positive sentiment extended across all monitored sectors, highlighting the private sector’s confidence in sustained growth.
