Uganda Private Sector Shrinks for 1st Time in 10 Months

The Stanbic Bank Uganda PMI fell to 49.5 in January 2025, down from 53.1 in December, marking the first contraction in the Ugandan private sector since March last year.

The decline was driven by weaker demand and reduced purchasing power, leading to a renewed drop in new business and ending a nine-month growth streak.

Also, output stagnated, with declines across all monitored sectors, while firms continued to cut jobs for the third consecutive month amid signs of spare capacity.

On the price front, input costs rose further, driven by higher purchase and staff costs, including increased utility and raw material prices.

In response, businesses raised selling prices for the fifth straight month, though the construction sector saw a decline in output charges.

Despite cost pressures, firms increased purchasing activity and inventories, supported by improved supplier delivery times.

Looking ahead, businesses remain optimistic, expecting stronger demand in the coming months.