Steady Factory Gains: Uganda Industrial Output Index Rises to 167.5

Uganda’s industrial sector registered a modest expansion in the fourth quarter of the 2025/26 financial year, driven by steady activity in manufacturing and energy generation.

Data released by the Uganda Bureau of Statistics shows that the Index of Industrial Production (IIP) rose to 167.5 during the quarter. This represents a measured increase in total physical output across factory production, utility output and processing industries compared to earlier periods.

For businesses and households across East Africa, industrial production figures provide a direct health check on economic demand. Higher factory output generally signals steady consumer demand, reliable electricity distribution, and strong trade flows, which together support job creation and regional supply chains.

Manufacturing drives output gains

The uptick in the overall index was primarily anchored by core manufacturing activities and energy production. Factory operations across food processing, consumer goods and industrial inputs maintained operational continuity, helping to absorb rising local demand.

The Index of Industrial Production measures the real volume of output produced by industrial enterprises over a specified timeframe, stripping out the impact of price inflation to reflect actual physical goods produced.

The energy sector also contributed positively to the quarterly result. Reliable electricity supply remained critical for keeping processing plants operational and preventing costly production downtime for industrial manufacturers.

Regional trade implications

Uganda’s industrial momentum carries wider significance for the East African Community (EAC) trade corridor. As a key exporter of processed agricultural goods, cement and manufactured fast-moving consumer goods to neighboring markets including Kenya, South Sudan and the Democratic Republic of Congo, higher Ugandan factory output supports regional commerce.

Industrial growth also helps stabilize primary commodity prices by expanding local processing capacity, ensuring that agricultural harvests are converted into higher-value consumer products domestically.

Supply chain outlook

Despite the positive quarterly print, Ugandan manufacturers continue to navigate external cost pressures, including fluctuating fuel costs, transport tariffs along the Northern Corridor, and foreign exchange volatility affecting imported raw materials.

Looking ahead, market participants will monitor whether industrial output can sustain its upward trajectory into the next financial year. Continued investments in power distribution infrastructure, regional transport corridors and local raw material processing will remain critical to sustaining factory growth.