The performance of Kenya’s private sector performance declined in January compared in the previous month, the latest Markit Stanbic Bank Kenya Purchasing Managers Index (PMI) survey has disclosed.
The Stanbic Bank Kenya PMI declined to 49.7 in January 2020 from 53.3 in the previous month, pointing the first contraction in the country private sector since April last year.
Output shrank at the sharpest pace in over two years, amid reports of weaker demand due to generalised cash flow problems in the economy and poor weather conditions.
“As a result, new orders and employment growth slowed. Purchasing activity also increased less, though stock levels continued to rise sharply,” the survey noted.
On the price front, input price inflation rose further, amid higher prices for commodities, fuel and flowers.
The survey noted that the output prices went up for the second straight month.
According to the survey, confidence soared to a near-record level as launches of new products, branch opening, and projections of rising demand should lead to a return to growth.
The PMI is based on data compiled from a survey sampling approximately 400 private sector companies, which have been carefully selected to accurately represent the true structure of the Kenyan economy, including agriculture, mining, manufacturing, services, construction and retail.
PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
JK/abj/APA