The overall objective of the study was to determine the factors influencing labour demand in Uganda using a Multivariate Linear Regression model. The study specifically focused on establishing the relationship between GDP, Capital Formation, Final Consumption Expenditure and Labor demand. The study explained the summary (descriptive statistics) at the univariate level while pairwise correlation and Multivariate Linear Regression modelwere employed at bivariate level and multivariate level respectively. Johansen’s Cointegration test revealed the presence of a long run relationship among the variables. The Multivariate Linear Regression modelrevealed that GDP and Capital Formation have statistically significant and positive effect on Labor demand at 5% level of significance holding other factors constant. The study recommended that the government should support agriculturalists to undertake modernization in agriculture, BoU should adopt efficient inflation-adjusting and reducing strategies so as to keep the inflation rate at mild level, aim at investing in the human capital and health and should encourage the establishment of the import substitution industries in Uganda.

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