Business conditions in Uganda’s private sector strengthened at the close of 2025, with growth edging higher in December, according to the latest survey of purchasing managers.
The Stanbic Bank Uganda Purchasing Managers’ Index (PMI) rose to 54.0, up from 53.8 in November. This marks the eleventh consecutive month that the gauge has remained above the 50.0 threshold that separates expansion from contraction.
The improvement was underpinned by sustained increases in output and new orders, which have risen continuously since February 2025. At the sector level, the expansion in activity was broad-based. Companies attributed the latest gains to improved demand and an increase in client numbers.
Despite the rise in new business, firms reported broadly unchanged employment levels in December. This followed a ten-month period of job creation; where hiring did occur in December, it was largely restricted to temporary workers. The lack of additional permanent capacity, coupled with rising order inflows, led to a renewed accumulation of work backlogs.
Input price inflation remained a factor, driven by higher utility costs, such as electricity and water, as well as rising construction material and sugar prices. Purchase costs rose while wage bills ticked down. Robust demand enabled firms to pass these costs on to customers in the form of higher selling prices.
“The state of employment was healthy, with staffing levels broadly steady following a ten-month period of growth, while backlogs mounted due to capacity pressure,” said Christopher Legilisho, economist at Stanbic Bank. He added that the brisk performance of the private sector should be confirmed when official GDP growth data is released.
Business sentiment regarding the 2026 outlook remains positive, S&P Global, which produces the index, said. This optimism is supported by planned investments in advertising and customer outreach to capitalise on expected demand.
