NAIROBI, Kenya, Feb 5 – Private sector activities in Kenya improved last month, according to the latest Stanbic Kenya Purchasing Manager’s Index (PMI), signaling an economic recovery.
This is after the PMI improved to 49.8 in January, up from 48.8 in December last year.
A PMI of 50 indicates growth in business activities, while below it signifies a downtick.
The bank links the stabilization to a continued drop in inflation pressure, slower contractions in activity, new orders, and new hiring.
“The Kenya Purchasing Managers Index (PMI) rose in January as business conditions for the private sector stepped closer to stability. Agriculture, construction and service sector companies reported increased activity,” Christopher Legilisho, economist at Standard Bank, said.
The report nonetheless shows that client demand and cash flow problems continued to impact sales at many firms.
“However, there were further declines in manufacturing and the wholesale and retail sectors, with firms remaining under pressure from insufficient cash flow,” Legilisho adds.
“However, surveyed firms still face pressure from both high import costs and taxation. Moreover, survey results indicate that business confidence for the year ahead is still subdued.”
