According to a report by Stanbic Bank, business conditions in Uganda showed improvement in December, as reflected by a rise in the headline Purchasing Managers’ Index (PMI) to 54.8 from 53.4 in November. This marks the highest PMI since June and extends the trend of surpassing the 50.0 no-change mark for the fourteenth consecutive month.
Christopher Legilisho, Economist at Stanbic Bank, highlighted the positive trend, stating that the latest figures signify an overall enhancement in private sector business conditions. The report suggests that firms are optimistic about customer demand and output outlook for the next 12 months. Ugandan companies reportedly increased inventories and quantities purchased in response to robust customer demand.
The PMI is an index that measures the economic health of the manufacturing sector. Readings above 50.0 indicate an improvement in business conditions, while readings below 50.0 signify a deterioration. The December PMI reading is reported to be above the average for 2023 as a whole (53.8).
Despite the economic improvements, Uganda’s annual inflation remained flat at 2.6% in December, according to the Uganda Bureau of Statistics (Ubos). The report notes that the softening of inflation over the past 12 months has alleviated pressures on households to increase consumption. Aliziki Lubega, the Director of Economic Statistics at Ubos, mentioned that on a calendar year basis, inflation eased to 4.4% in 2023 compared to 8.8% in January 2023.
The positive business conditions, coupled with stable inflation rates, indicate a favorable economic environment in Uganda, with the private sector showing resilience and optimism for future growth.