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Uganda’s private sector showed continued growth in March 2025, as reflected by the latest Stanbic Purchasing Managers' Index (PMI), which rose to 52.9, up from 52.6 in February.
This marks a second consecutive month of improvement, signalling ongoing recovery and optimism for the remainder of the year.
The increase was driven by strong demand conditions, which encouraged firms to increase their buying of inputs, stock up on inventory, and prepare for further upturns in business activity later in the year.
Sectors Witness Broad-Based Growth
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According to Christopher Legilisho, Economist at Stanbic Bank, the March PMI confirmed that consumer demand remains robust, supporting growth in output, new orders, and employment across various sectors.
The survey, which includes responses from about 400 purchasing managers in sectors like agriculture, mining, manufacturing, construction, and services, revealed broad-based growth in Quarter 1 of 2025.
All five sectors monitored by the survey—agriculture, mining, manufacturing, construction, wholesale, retail, and services—reported an increase in business activity, with the new orders index remaining a key driver.
Rising Costs Amid Growth
Despite the positive growth in business activity, inflationary pressures continued to impact firms. Rising input costs, driven by increased utility bills, shipping fees, commodity prices, and staff costs, pushed overall input prices higher in March.
As a result, companies were able to pass on these costs to consumers, raising their output charges for the seventh consecutive month. Firms remained optimistic about the economic outlook, with strong sales expected to continue over the next 12 months.
This optimism led to increased staffing levels, with businesses hiring additional workers, particularly temporary staff, to manage growing workloads.
Despite these challenges, firms were able to clear backlogs for the third consecutive month in March, thanks to increased capacity from job creation.
The positive economic conditions in the private sector also prompted businesses to expand their input buying and build pre-production inventories, benefiting from faster supplier delivery times.