The private sector in Kenya contracted in March, in 16 months according to Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) with a score of 51.0.
The reading pointed to the weakest expansion in private activity since November 2017 when conditions last deteriorated. “This represented the softest expansion in 16 months, despite new business from abroad increasing sharply.”
That’s down from 51.2 in February, Any reading above 50 indicates growth slightly below the PMI rate of 50 that separates expansion from contraction.
“The drop in the PMI doesn’t really come as a surprise as agricultural productivity is usually weaker in the first quarter,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank. “As the long rains commence probably from April, higher output from the agriculture sub-sector is likely to underpin private sector activity.”
According to the survey, output, new orders and employment recorded weaker expansions. Firms kept output prices level, ending a 15-month sequence of inflation, as input costs rose at a softer pace. “Despite this, future expectations climbed to a four-and-a-half-year high.”