The performance of Kenya’s private sector inched higher to 53.3 in December 2019 from 53.2 in the previous month, pointing the strongest expansion in the country private sector in three months, the latest Markit Stanbic Bank Kenya Purchasing Managers Index (PMI) survey released on Monday disclosed.
According to the survey, output grew only marginally amid weather disruption while new orders expanded at a faster rate, as a solid rise in backlogs.
New export orders increased at a steep rate, due to greater demand from European customers. Meantime, employment rose, albeit at the softest pace in seven months, noted the PMI survey.
“Stocks of purchases also increased, although the rate of expansion eased back for the fourth month running, On the price front, input price inflation climbed to a four-month high, as suppliers raising their charges amid disruptions from heavy rains,” noted the survey.
“Private sector arrears should be the main priority for the government in order to alleviate severe cash flow shortages which firms are grappling with,” said Jibran Qureishi, regional economist for East Africa at Stanbic.
PMI readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
Meanwhile, the survey pointed out that output prices increased for first time in three months, noting that confidence improved slightly amid a launches of new products, branch opening, and advertising efforts.
Meanwhile, manufacturing PMI in Kenya averaged 52.52 points from 2014 until 2019, reaching an all-time high of 57.70 points in December of 2014 and a record low of 34.40 points in October of 2017.
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.
JK/abj/APA