Despite 2026 being an election year, the Uganda Stanbic Purchasing Managers’ Index released on January 6 indicates that Ugandan companies remain optimistic, expecting business activity to expand over the coming year.
The business outlook represents collective expectations of business leaders regarding future growth, profitability, and economic stability.
The surveyors of the Uganda Stanbic Purchasing Managers Index (PMI) state that the confidence in the outlook was underpinned by investment in advertising, new product releases and spending on outreach to new customers and that positive sentiment regarding output expectations was broad- based by sector covered by the PMI survey in December 2025.
Specifics on how the business conditions in Uganda were in December, Stanbic PMI states that the Ugandan private sector remained in growth territory in December 2025.
The survey results revealed that business conditions continued to improve amid sustained expansions in output and new orders.
Firms were also upbeat regarding the outlook for output in the coming year, which spurred greater input buying and efforts to build stocks.
The headline figure derived from the survey is the Purchasing Managers’ Index (PMI). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
The Stanbic survey showed that the headline PMI in Uganda stood at 54.0 in December, the headline PMI was up slightly from 53.8 in November and signalled a further upturn in the health of the Ugandan private sector. The latest data indicated an eleventh successive monthly improvement in business conditions.
Commenting on the Stanbic PMI in Uganda, Mr Christopher Legilisho, an economist at Stanbic Bank, said: “Conditions in Uganda’s private sector were upbeat as the Uganda Stanbic Purchasing Managers Index (PMI) remained in expansion territory in December, implying that strong consumer demand conditions drove new orders and boosted output in the private sector.’
Mr Legilisho said 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 from increasing orders. Adding that this was evident in further expansions in quantities purchased and inventories held by Ugandan firms.
“The rise in input prices was linked to elevated water and electricity costs in December. Purchase prices also increased due to concerns about construction costs, among other factors. Wage costs were broadly flat, while output prices increased due to robust customer demand. On the whole, this suggests that the economy is performing briskly, which should be confirmed when official growth data is released,” he explained.
Employment
The stanbic PMI indicates that during the period, staffing numbers at Ugandan businesses were broadly unchanged at the end of the year, thereby ending a ten-month sequence of job creation. Where employment increased, survey respondents stated this was linked to greater use of temporary workers.
Stocks of purchases
In line with greater new order inflows, Ugandan companies registered a further expansion in stocks of purchases during December.
Inventory levels have increased for ten successive months. Where a rise was noted, firms linked this to healthy demand conditions and anticipated upturns in output.
Input prices
As has been the case for almost four-and-a-half years, Ugandan businesses recorded another monthly rise in operating expenses at the end of the year. The report states that higher overall input prices were due to increases in fuel and utility costs, especially electricity and water. Total input costs rose in each of the five tracked sectors.
Purchase prices
Ugandan private sector companies saw another monthly increase in purchase costs during December. Purchase prices have risen in successive months since August 2021.
In line with reports regarding total input costs, fuel price increases were a common driver of higher bills, alongside greater charges for construction materials and sugar. The report states all monitored sectors registered higher purchase prices.
Staff costs
Weighing on the increase in total input costs was a renewed decrease in wage bills at Ugandan companies at the end of the fourth quarter.
The decline followed a 21-month sequence of inflation. Lower staffing costs in the construction and wholesale and retail sectors contrasted with increases elsewhere.
Output prices
In line with a sustained upturn in new business, Stanbic PMI reveals that Ugandan private sector firms noted a further rise in output charges during December.
Accommodative demand conditions enabled companies to pass through higher costs to customers via an increase in selling prices. Higher output charges were seen in the manufacturing, wholesale and retail and service sectors.