Investments in advertising and greater product quality were widely cited as drivers of consumer confidence, with all monitored sectors in the monthly Stanbic Purchasing Managers‘ Index (PMI) registering optimism during September.Compiled by S&P Global, the latest survey data indicates continued expansions in output and new orders, as demand from customers was sustained, but the headline Stanbic PMI dropped slightly to 53.0 in September compared to 55.0 in August.However, this reading is still indicative of a continuous improvement in the overall health of the Ugandan private sector since February 2025.Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show deterioration.Referring to the September data, Christopher Legilisho, an Economist at Stanbic Bank said, “The Stanbic Bank Uganda PMI remained firmly in expansionary territory in September, although the headline reading moderated materially relative to its six-and 12-month trends.New orders and output remained resilient, consistent with favourable demand conditions, while employment increased across most sectors except services. However, rising backlogs driven by stronger demand and payment delays suggest that firms are facing growing capacity and working capital constraints.”Many panelists reported greater business activity stemmed from increased new order inflows and successful advertising campaigns. New sales, meanwhile, rose again at the end of the third quarter. Companies stated that sustained demand conditions and interest following promotional activity boosted new business.The monthly Stanbic PMI relies on the responses to questionnaires sent to purchasing managers. The sectors covered by the survey include agriculture, mining, manufacturing, construction, wholesale, retail & services.The PMI is a weighted average of the following five indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%).At the sector level, the expansion in new orders during September was broad-based, but agriculture and wholesale & retail firms recorded contractions in output levels.Legilisho said, “Supply-side pressures nevertheless intensified as higher transport and logistics costs strained supply chains. Firms responded by increasing purchasing activity and building inventories in anticipation of sustained demand, providing a buffer against potential disruptions but also increasing exposure to elevated input costs.”The rise in operating expenses was often linked to higher utility, fuel and transportation costs, with firms also recording an uptick in wage bills. Greater total input costs were seen in all five monitored sectors.Amid accommodative demand conditions and greater input costs, firms sought to pass through operating expenses to their customers via a hike in selling prices. Output charges increased in all sectors except construction where a fall was recorded.In line with greater new orders and signs of pressure on capacity, Ugandan companies took on additional staff in September. Anecdotal evidence suggested that hiring included both temporary and permanent staff.Backlogs of work, meanwhile, rose for the fourth month running, with some firms highlighting that delayed payments hampered the processing of incoming work.Input buying also increased during September, as firms adjusted their purchasing activity to greater business requirements. Some also sought to build stocks amid expectations of increased new orders in the coming months, with inventories rising for the nineteenth month running.Nonetheless, companies recorded a fresh decline in vendor performance amid international transportation delays and higher fuel costs.The post Stanbic PMI: Uganda’s Private Sector Growth Slows but Remains in Expansion appeared first on The Insider.