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Kenya’s private sector activity deteriorated in January on low demand ‘as a result of poor cash flow in the economy’ the latest PMI data showed on Wednesday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) for manufacturing and services fell to 49.7 in January from 53.3 in December. Readings above 50 indicate growth.
“Overall activity levels contracted solidly at the start of the year, as firms reported that a lack of money at households led to much softer demand pressure,” the survey report said.
Jibran Qureishi, Regional Economist E.A at Stanbic Bank commented:
“Despite the slow start to the year from the private sector, there are reasons to be optimistic for the year ahead.
However, business confidence for future output soared, which doesn’t come as a surprise given some of the recent reforms such as the repeal of the interest rate capping law and ongoing clearance of private sector arrears which should underpin activity going forward. We also expect the agricultural sector to perform much better this year.”
