Kenya Business Confidence Improves to Five-Month High in July: PMI

the Governor of the Central Bank of Kenya (CBK), Dr. Patrick Njoroge, wrote an op-ed on Greening Kenya’s Banking Sector.

Nairobi, the capital City of Kenya. PHOTO: KHUSOKO

Kenya’s private sector confidence improved in July to hit a five-month high, a survey showed on Wednesday, a sign that the economic recovery was broadening besides a fresh wave of coronavirus infections.

A third of businesses surveyed provided a positive forecast for output over the coming 12 months.

 “Several firms cited plans to open new branches and increase their advertising,” according to the PMI Index survey findings.

However, the sector’s growth was at its slowest rate in July as output and new order growth weakened to three-month lows.

According to the Purchasing Managers Index (PMI) by Stanbic Bank Kenya, which tracks growth in the manufacturing and services sectors, eased marginally to 50.6 points in July from a higher 51 points in June. 

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

“Economic activity increased marginally in July from the previous month. Domestic demand improved by the second slowest pace since the lifting of public health restrictions after the first wave of pandemic, with some firms reporting a drop in customer numbers,” said Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank.

The index found out that the output, new orders and employment indices, all fell to three-month lows, but remained above the 50.0 no-change mark to indicate further expansions.

On the other hand, businesses that saw an increase in new order volumes pointed to an improvement in cash flow and increased marketing activity. 

However, others reported losing customers due to the ongoing effect of the pandemic. 

Currently, a nationwide curfew in Kenya runs from 10 p.m. to 4 a.m.