Kenya Business Confidence Worsened in June, PMI Survey

“The higher deficit was attributed to lower service receipts, which more than offset the increased receipts from exports and remittances.”

The Port of Mombasa

The Covid-19 pandemic could harm business activity in Kenya’s private sector. This is despite a second consecutive monthly improvement in the health of the private sector in June, according to Stanbic Bank Kenya PMI.

Stanbic Bank Kenya Purchasing Managers’ Index (PMI) in a statement said, “Concerns about further COVID-19 restrictions meant that the business outlook slipped to the second-weakest in the series history.”

The PMI fell from 52.5 in May to 51.0 in June indicating a sustained, but weaker, expansion in the Kenyan private sector economy.

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

“The pace of the recovery slowed in June following the strong improvement witnessed in May when some of the stringent public health restrictions were lifted. Both domestic and export demand increased on account of higher customer numbers and increased cash circulation; but the increase was at a slower rate than in May,” Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank commented. 

“To meet the rising demand, firms increased their purchases, staff costs and output but at a slower rate than demand which resulted in an increase in work backlogs.”

Kenya Inflation Up More Than Expected in June at 6.32%