The highest reading for three months.
Kenya’s service sector activity continued to expand in January on the back of new work even as employment declined further and exports contracted, a private survey showed Wednesday.
The monthly Purchasing Managers’ Index (PMI) by Stanbic Bank, the sector grew 53.2 during the month under review, up from 51.4 in December.
A reading above 50 on the index shows expansion and below it indicates contraction.
The index pointed to a solid improvement in the health of the private sector economy and the seventh consecutive month of growth since the COVID-19 outbreak.
Kuria Kamau, fixed income and currency strategist at Stanbic Bank said this was driven by sharp increases in output and new business. Workforce numbers rose at a faster rate, while firms also expressed stronger optimism towards the next year of activity.
“While inflationary pressures from the higher VAT and raw material shortages led to a steep rise in output prices, firms are now more positive about an improvement in business conditions over the next 12 months than they were last month.”
The index further showed that business expectations for the year ahead improved sharply at the start of 2021, to the strongest since last June.
“Companies were hopeful of carrying out expansion plans and investing in new capital, amid optimism that the COVID-19 pandemic will end.”