3rd December 2022

Low consumer demand, growth in output slows Kenya’s February private sector activity

The Credit Guarantee Scheme is one of the government’s incentives to mobilise private sector capital towards development goals.

Kenya’s private sector activity fell in February to its lowest level in 15 months, hit by slowing consumer demand and growth in output, Markit Stanbic Bank Purchasing Managers’ Index (PMI) survey showed on Tuesday.

“Contributing to the fall in the headline figure, new order growth slowed considerably in February to the weakest in the current sequence of expansion. Moreover, over 25 percent of firms saw a fall in sales amid softer customer demand,” the survey report said.

“The first quarter of the year is usually associated with dry weather conditions and hence it is not surprising that the PMI is falling. This is more of a cyclical trend and as the long rains commence towards March and April, activity generally tends to recover, boosting domestic demand,” said Jibran Qureishi, regional economist East Africa at Stanbic Bank.

“A weaker rise in overall demand instigated slower output growth at Kenyan firms in February. The rate at which activity increased was the least marked in 15 months.”

The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services fell to 51.2 from 53.2 in January.