Business activity in Kenya’s private sector slowed in March, weighed down by rising input costs, according to Purchasing Managers’ Index survey published on Tuesday.
The Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) dropped from 52.9 in February to 50.5 in March, signaling a slower and only marginal improvement in the health of the Kenyan private sector economy.
“The slowdown was driven by rising inflation which resulted in subdued demand growth by consumers and a contraction in output by producers,” said Kuria Kamau, Fixed Income and Currency Strategist at Stanbic Bank.
“Input prices rose at the fastest rate in eight years driven by higher taxes and the Russia-Ukraine conflict which has increased fuel, food, and fertiliser raw material costs.”
The index collaborates with the Monetary Policy Committee’s (MPC) Private Sector Market Perceptions Survey, respondents were concerned about the impact of the Russia-Ukraine conflict on commodity prices and supply chains, in addition to the increased political activity.
The poll done between March 1 and 14 2022, reported economic environment concerns at 15 percent while reduced consumer demand and cost of doing business were listed by 11 percent of the respondents
“Firms continue to be concerned that business activity will be affected by increased political activity as investors adopt a ‘wait and see approach to investments. On the brighter side, most firms remain optimistic that business activity to quickly pick up shortly after the conclusion of the elections,” the poll indicated.
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