Buoyed by accelerated increases in new orders and production, Kenya’s private sector in September grew the fastest rate since April 2018.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) jumped to 56.3 in September, from 53.0 in August, its highest level since April 2018. Any reading above 50 indicates growth.
The index rose from 53.0 in August and marked the third successive expansion since the downturn caused by the COVID-19 outbreak.
“With the government easing lockdown restrictions during the third quarter of the year, firms saw a release of pent-up demand as clients largely returned to markets,” the survey report said.
However, the report indicated that despite stronger growth, companies were less confident about the 12-month outlook in September.
“In fact, the level of sentiment was the weakest in the series history, with only 27 percent of panelists expecting output to continue expanding. Despite plans to raise investment and open into new markets, firms were concerned that the economy could face a further setback from the pandemic.”
Head of Africa Research at Stanbic Bank Jibran Qureishi said, “This should gradually continue to support activity into the end of the year. That said, we ought to be cautious around the possibility of a second wave globally that could dampen external demand again.”
Similarly, the latest Market Perception index by Central Bank of Kenya (CBK) showed the level of optimism among bank chief executives which sunk to a year low of 44 percent in May from a high of 92 percent in January rose sharply to 81 percent in September as Covid-19 restrictions eased.
“Other factors that contributed to this optimism included reduced COVID-19 infection rates, expected implementation of the Government’s Economic Stimulus Programme, the resilience of the agriculture sector, recovery of private sector credit growth and a rebound in consumer spending. Nevertheless, uncertainties regarding a possible second wave of COVID-19 infections were noted,” said the CBK after it retained the benchmark rate at 7.00%.