Besides cash flow problems, Kenya’s private sector is gradually regaining momentum, after posting 54.1 in September 2019 from 52.9 in the previous month, signaling optimism for the business.
“Sales growth accelerated to 13-month high, leading firms to expand their output at a quicker, albeit modest pace. Workforce numbers also increased, as firms remained highly optimistic for future activity. At the same time, cost pressures weakened to a near two-year low, while output price inflation also eased,” reads the Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) survey findings.
Any reading above 50 indicates growth.
“Private sector activity is showing signs of momentum, although panelists continue to highlight cash flow issues that they face,” said Jibran Qureishi, regional economist for East Africa at Stanbic Bank.
“In addition to the current stock of arrears owed to the private sector, the interest-rate-capping law could also hold back firms from flourishing on a multi-month basis.”
The rate of expansion climbed to the strongest for 13 months, with several firms reporting higher client numbers since August.