Uganda’s Business Conditions Improve in December 2025
Uganda’s private sector showed continued resilience in December 2025, with the Stanbic Purchasing Managers Index (PMI) rising to 54.0 from 53.8 in November. This marks the eleventh consecutive month of improvement in business conditions, as the PMI reading above 50.0 indicates growth in comparison to the previous month.
Despite higher input costs, Uganda’s business conditions continued to show positive momentum. The growth was largely driven by sustained expansions in output and new orders, with strong consumer demand enabling firms to raise selling prices.
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Strong Demand and Stable Employment
The survey highlighted continued growth in new sales, which have been rising since February 2025. Survey respondents cited increased client numbers as a key driver behind stronger demand. While employment levels remained broadly unchanged in December, some firms added temporary workers to meet rising order volumes. This combination of strong demand and stable employment contributed to the accumulation of backlogs, as firms faced capacity pressures.
Inflationary pressures remained a concern, particularly with rising purchase prices, utilities, and construction costs. However, wage costs remained stable, while output prices rose due to higher customer demand. Firms passed on higher costs to consumers through price increases, particularly during the festive season.
Inflationary Pressures and Cost Management
Legilisho, Economist at Stanbic Bank, pointed out that input prices rose significantly toward the end of the year, particularly due to increased utility costs and construction materials. However, the survey found that wages remained relatively flat. Companies responded to these pressures by adjusting selling prices to protect their margins.
Despite the increased operating expenses, firms maintained optimism for the year ahead. Increased demand from new orders, along with higher input buying, suggests that Uganda’s private sector will continue expanding in 2026.
Positive Outlook for 2026
Looking ahead, businesses remain positive about 2026, with expectations of continued demand growth. Increased investment in advertising and customer outreach is expected to support optimism across the private sector.
The Stanbic PMI rise to 54.0 in December 2025 reflects Uganda’s ongoing recovery, signaling that businesses are not only managing inflationary pressures but are also poised for growth in the coming year.
