S&P PMI: Uganda’s private sector sees continued growth in August ’24

Uganda’s private sector saw continued growth in August 2024, driven by new orders and job creation, while businesses remain optimistic about further expansion over the next 12 months. The PMI rose to 56.3 in August from 53.7 in July, marking the fifth month of improved business conditions.

Anticipating sustained increases in new orders, firms have boosted hiring and stockpiling in preparation for future growth. New client acquisitions and a favourable sales environment led to further output growth across all five monitored sectors. However, this expansion has increased pressure on capacity, with backlogs of work rising for the first time in eight months.

Despite rising input costs, including higher purchase prices and wages, firms reduced selling prices for the first time since March 2023 to attract new clients. The official headline inflation rate for August dropped to 3.5 per cent year-on-year (YoY) from 4.0 per cent in July.

Stanbic Bank Economist Christopher Legilisho noted the private sector’s resilience and ongoing optimism, despite challenges from rising costs, especially outside the agricultural sector.

Attribution: Stanbic Bank Uganda PMI®

Subediting: M. S. Salama