Kenya’s private sector activity ticked up slightly in November, however, businesses remain cautious about the economy in 2020 according to Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI).
The headline PMI was unchanged at 53.2 in November, indicating a solid rate of growth in the private sector. Readings above 50.0 signal an improvement in business conditions, while readings below 50.0 show a deterioration.
The survey said new orders that Kenyan companies received during the month expanded at the slowest rate in six months. Output grew at the fastest pace in four months.
“A rise in output requirements encouraged firms to increase workforce numbers for the seventh consecutive month in November. The rate of expansion was solid and broadly similar to October,” reads the survey however, despite higher demand, firms sought to lower selling prices for the second month in a row during November.
“At the same time, input costs rose at the softest pace since August 2017, as companies reported only a modest increase in purchase prices and a slight uptick in staffing costs. Higher purchase costs were mainly attributed to higher import costs and taxes.”
Jibran Qureishi, Regional Economist E.A at Stanbic Bank commented: “The future output sub-index still indicates that firms are cautious on activity over the coming year. However, in comparison to most surveys since the beginning of this year, less panellists complained about cashflow issues this month.”
With the removal of a cap on commercial interest rates, Jibran said, “The private sector will indeed be in a much better position than it currently is or has been for the past 2 and a half years.”