Kenya’s September PMI Falls Five-month Low on High Cost of Living

Higher fuel prices was a key factor leading to the uptick in living costs. As well as impacting demand, businesses found that the price hike added to purchasing prices, which rose sharply.

Kenya’s private sector activity fell in September from August’s 51.1 to 50.4 as rising living costs weighed on consumer spending and new orders, a monthly survey said Tuesday.

Data from Stanbic Bank shows the Purchasing Managers’ Index (PMI) noted that the pace of improvement was marginal and the weakest seen in the current five-month sequence of growth.

“The improvement in domestic demand was negatively affected by a rise in output prices. Firms hiked output prices to protect their profit margins following a rise in fuel prices during the month,” noted Stanbic Bank Fixed Income and Currency Strategist Kuria Kamau.

Data from the Kenya National Bureau of Statistics (KNBS), showed that the rate of inflation surged to 6.9 per cent in September, its highest count since February 2020.

During the month, output and new orders rose in September, driven by a continued recovery in demand from the strict lockdown earlier in the year. Exports were also a key source of growth, as foreign orders increased at the fastest rate since October 2020.