Private sector growth slows to lowest since January

What the report says

Uganda’s private sector continued to expand in September, but growth eased to its slowest pace since January, according to the Stanbic Bank Uganda Purchasing Managers’ Index compiled by S&P Global and sponsored by Stanbic Bank. The headline reading fell to 53 from 55 in August, remaining above the 50 mark that separates expansion from contraction. Uganda Business News reported that the slowdown came as higher fuel and transport costs, along with other supply-chain pressures, weighed on business activity.

The survey showed output rose for a twentieth straight month, supported by stronger new orders and marketing campaigns. However, some sectors, including agriculture and wholesale and retail, saw weaker output. Businesses across all monitored sectors faced higher costs, including utilities, fuel, transport and wages, and many passed part of those increases on to customers through higher selling prices. Construction was the only sector where selling prices fell.

The report also noted that firms continued hiring and built up inventories for a nineteenth month, even as backlogs of work increased for a fourth consecutive month. Delayed payments and slower deliveries were among the factors cited by respondents. Stanbic economist Christopher Legilisho said the result pointed to growing capacity and working-capital pressures. The survey covered about 400 private companies, with data collected between 10 and 28 September.

Uganda Business News placed the PMI data alongside broader inflation pressure, including faster annual price growth and sharp increases in petrol, diesel and transport costs. It also cited market expectations that the Bank of Uganda may tighten policy later in the year, underscoring how rising input costs could affect business conditions and inflation in the months ahead.