%2C%20Stanbic%20Bank%20Chief%20Executive%20shaking%20hands%20with%20Ronald%20Makata%2C%20bank's%20Chief%20Finance%20Officer%2C%20Looking%20on%20is%20Tich%20Makonese%2C%20the%20Stanbic%20Head%20Bankassurance%20.jpg&w=3840&q=75)
Business confidence in Uganda rose sharply in May, with the Stanbic Bank Uganda Purchasing Managers’ Index (PMI) hitting 56.4, up from April’s 55.3. The index remained well above the 50.0 mark that signals positive sentiment, recording its strongest performance in nearly two years.
The PMI is compiled by S&P Global using survey responses from purchasing managers at around 400 private sector firms in agriculture, mining, manufacturing, construction, wholesale, retail, and services.
Christopher Legilisho, an economist at Stanbic Bank, said, "Stanbic Bank Uganda PMI data for May was still stronger, expanding to the highest level in 23 months, implying sustained private sector momentum. Robust new orders and output were attributed to increased sales and strong customer demand across all monitored sectors. Ugandan firms increased staffing levels for a fourth month, both part-time and full-time, due to increased output. Staffing costs ticked up as some companies paid bonuses to motivate workers.”
Growth in new orders and output fuelled a rise in staffing, input buying and inventory building. With customer demand high and expectations for future output strong, firms continued investing in materials and personnel.
Legilisho said, “With greater operational capacity, firms were able to reduce outstanding work, leading to a further decline in backlogs during May. Purchasing activity expanded, and inventories rose as firms increased input buying.”
He added, “Firms raised output prices in response to strong demand conditions, while overall input and purchase costs continued to rise. This was largely due to higher operating expenses and increased costs of key goods such as cement, soap, and food, pointing to a moderate build-up in inflationary pressures. Despite the cost increases, firms remained optimistic about business conditions, expecting growth in customer demand and output over the next 12 months."
The survey recorded growth in all five monitored sectors. Firms reported continued improvement in operating conditions since February, driven by higher sales, customer gains and growing employment. Despite rising costs, businesses raised prices only in the service and agriculture sectors.
Though supplier performance dipped slightly, firms still expanded purchases and stock levels, preparing for sustained demand in the months ahead.
