The business environment remained favorable for investors in September 2025, but purchase and staff costs continued to climb, pushing overall input prices higher.
The Stanbic Purchasing Managers’ Index (PMI) survey shows that output charges rose for the 13th month as companies passed increased costs on to customers. Prices of key inputs such as cement and paper products went up, while wage bills increased in line with higher employment levels.
The rise in input prices was broad-based across all sectors. Despite rising inflationary pressures, the private sector continued to expand, with the headline PMI rising to 54, up from 53.3 in August. This was the eighth month of improved business conditions. A PMI reading above 50 indicates expansion.
The continued growth was driven by a rise in new business and stronger demand. Companies reported an upturn in output as they adjusted production to meet increased orders.
All monitored sectors, including agriculture, industry, construction, wholesale and retail, and services, recorded growth in output and new business.
‘Private sector momentum remained strong in September, with robust consumer demand driving new orders and output,’ said Christopher Legilisho, Stanbic Bank economist.
‘Businesses remain optimistic about future activity, with expectations of sales and hiring in the next 12 months,’ he said, noting that inflationary pressures persisted as purchase prices, wages, and output charges all rose.
However, Legilisho said business confidence remained high, reflecting optimism about the economic trajectory.
The survey indicated that firms expanded capacity in September to accommodate increased orders, resulting in further growth in employment and input purchases.
Job creation extended to an eighth consecutive month, with most firms hiring temporary workers
.
Staff costs also rose, continuing a trend that began more than 18 months ago, as firms attributed higher wage bills to workforce growth.
Meanwhile, Uganda Bureau of Statistics reported that annual headline inflation for the year to September rose to 4 percent from 3.8 percent in August.
Input price inflation, largely driven by higher fuel and utility costs, persisted across all sectors. Similarly, output prices rose as firms sought to recover rising costs.
Nevertheless, the agriculture and construction sectors recorded slight declines in selling prices.